Question $1$A

SportsCards Inc. manufactures baseball cards sold in packs of $10$ in drugstores and grocery stores throughout the country. It is the second leading firm in an industry with four major firms. SportsCards has been approached by Zip Cereal Inc., which would like to order a special edition of cards to use as a promotion with its new cereal. SportsCards would be solely responsible for designing and producing the cards. Zip wants to order $30,000$ sets and has offered $$25,500$ for the total order. Each set will consist of $30$ cards. SportsCards currently produces cards in sheets of $120$ cards.

A$.$ Production, Marketing & Other Costs $($Dollars Per Sheet$)$

Direct Materials $1\mathrm{.}3$

Direct Labor $0\mathrm{.}25$

Variable Overhead $($O$/$H$)0\mathrm{.}45$

Fixed O$/$H $($Factory Rent$)0\mathrm{.}2$

Variable Marketing $($Sales Commission$)0\mathrm{.}05$

Fixed Marketing $0\mathrm{.}35$

Head Office Salaries $0\mathrm{.}1$

B$.$ Cost for Special Order $($Total Dollars$)$

Design $2500$

Other Setup Costs $5000$

SportsCards would incur no marketing costs for the special order. It has the capacity to accept this order without interrupting regular production.

Required:

$(1)$ Should SportsCards accept the special order? Why or why not $($support your answer with appropriate calculations$)$