Horngrens 11e

E25-10

2 E25-10 Making special pricing decisions Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hungry-Cardz with a special order. The Hall of Fame wishes to purchase 55,000 baseball card packs for a special promotional campaign and offers $0.33 per pack, a total of $18,150. Hungry-Cardz's total production cost is $0.53 per pack, as follows: Variable costs 0.13 Direct materials 0.04 Direct labor Variable overhead 0.11 0.25 Fixed overhead 0.53 Total cost Hungry-Cardz has enough excess capacity to handle the special order. Requirements 1. Prepare a differential analysis to determine whether Hungry-Cardz should accept the special sales order. 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hungry Cardz will spend $5,000 to develop this hologram, which will be useless after the special order is completed. Should Hungry Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.33 per pack