Homerun Corporation produces baseball bats for kids that it sells for $35 each. At capacity, the company can produce 36,000 bats a year. The costs of producing and selling 36,000 bats are as follows: (Click to view the costs.) Read the requirements. Requirement 1. Suppose Homerun is currently producing and selling 22,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Gehrig Corporation wants to place a one-time special order for 14,000 bats at $23 each. Homerun will incur no variable selling costs for this special order. Should Homerun accept this one-time special order? Show your calculations. Determine the effect on operating income if the order is accepted. (Enter decreases in operating income with parentheses or a minus sign.) Increase (decrease) in operating income if order is accepted Homerun should Gehrig's special order because it operating income by Requirement 2. No bats to its regular c - X ig's offer it will have to sell 14,000 fewer Data table order? Show your calculations. (b) On financial considerat d continuing to sell to its regular customers at $35 p -time special order? (a) On financial con Cost per Bat Total Costs Determine the effed Direct materials $ 16 $ 576,000 entheses or a minus sign.) Variable direct manufacturing labor 2 72,000 Variable manufacturing overhead 2 72,000 Fixed manufacturing overhead 108,000 Variable selling expenses 72,000 Increase (decrease UI N Fixed selling expenses 180,000 On financial consid Total costs $ 30 $ 1,080,000 operating income (h) On financial ron order and continuing to call to its regular Print Done NextRequirement 2. Now suppose Homerun is currently producing and selling 36,000 bats. If Homerun accepts Gehrig's offer it will have to sell 14,000 fewer bats to its regular customers. (a) On financial considerations alone, should Homerun accept this one-time special order? Show your calculations. (b) On financial considerations alone, at what price would Homerun be indifferent between accepting the special order and continuing to sell to its regular customers at $35 per bat? (c) What other factors should Homerun consider in deciding whether to accept the one-time special order? (a) On financial considerations alone, should Homerun accept this one-time special order? Show your calculations. Determine the effect on operating income if the order is accepted. (Enter decreases in operating income with parentheses or a minus sign.) Increase (decrease) in operating income if order is accepted On financial consideration alone, Homerun should Gehrig's special order because it operating income by (b) On financial considerations alone, at what price would Homerun be indifferent between accepting the special order and continuing to sell to its regular customers at $35 per bat? Homerun would be indifferent between accepting the special order and continuing to sell to its regular customers at $35 per bat if the special selling price was (c) What other factors should Homerun consider in deciding whether to accept the one-time special order? () A. Can the company afford to adopt the special order price long-term or with other customers who may ask for price concessions? (_) B. The effect on customer relationships by refusing sales from existing customers. (_) C. Determine if the possibility of future long-term sales from Gehrig seems likely. () D. All of the above