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Show All Your Works For Your Answer: Calculate: Variable manufacturing costs Contribution margin Additional fixed expenses associated with the order Increase (decrease) in operating income
Show All Your Works For Your Answer: Calculate: "Variable manufacturing costs" Contribution margin Additional fixed expenses associated with the order "Increase (decrease) in operating income from the special order In Requirement 1 Active-Cardz's total production cost is $0.53 per pack, as follows: Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Active - Cardz with a special order. The Hall of Fame wants to purchase 58,000 baseball card packs for a special promotional campaign and offers $0.33 per pack, a total of $19,140. Active-Cardz has enough excess capacity to handle the special order. Requirement 1. Prepare an incremental analysis to determine whether Active - Cardz should accept the special sales order assuming fixed costs would not be affected by the special order. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Total Order Per Unit (58,000 units) $ 0.33 $ 19,140 _ 0.28 Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order $ 0.05 Increase (decrease) in operating income from the special order - X 0 Requirements Ja Data Table - X Variable costs: Direct materials ............. $ 0.11 1. Prepare an incremental analysis to determine whether Active-Cardz should accept the special sales order assuming fixed costs would not be affected by the special order. 2. Now assume that the Hall of Fame wants special hologram baseball cards. Active-Cardz must spend $5,000 to develop this hologram, which will be useless after the special order is completed. Should Active-Cardz accept the special order under these circumstances? Show your analysis. 0.07 Direct labor .......... Variable overhead 0.10 0.25 Fixed overhead $ 0.53 Total cost Print Done
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