Runner Corporation produces baseball bats for kids that it sells for $30 each. At capacity, the company can produce 54,000 bats a year. The costs of producing and selling 54,000 bats are as follows: (Click to view the costs.) Read the requirements Requirement 1. Suppose Runner is currently producing and selling 34,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Ripken Corporation wants to place a one-time special order for 20,000 bats at $20 each. Runner will incur no variable selling costs for this special order. Should Runner 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.) i Requirements - X Increase (decrease) in operating income if order is accepted Data Table Cost per Bat Direct materials Variable direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Total Costs 540,000 108,000 54,000 162,000 108,000 216,000 1,188,000 1. Suppose Runner is currently producing and selling 34,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Ripken Corporation wants to place a one-time special order for 20.000 bats at $20 each. Runner will incur no variable selling costs for this special order. Should Runner accept this one-time special order? Show your calculations. 2. Now suppose Runner is currently producing and selling 54,000 bats. If Runner accepts Ripken's offer it will have to sell 20,000 fewer bats to its regular customers. (a) On financial considerations alone, should Runner accept this one-time special order? Show your calculations. (b) On financial considerations alone, at what price would Runner be indifferent between accepting the special order and continuing to sell to its regular customers at $30 per bat? (c) What other factors should Runner consider in deciding whether to accept the one-time special order? Fixed selling expenses 22 $ Total costs Print Done Print Done