Question
Special order decisions given two scenarios Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached SportCardz with a special order. The Hall
Special order decisions given two scenarios Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached SportCardz with a special order. The Hall of Fame wishes to purchase 50,000 baseball card packs for a special promotional campaign and offers $.35 per pack, a total of $17,500. SportCardz total production cost is $0.55 per pack, as follows: Variable costs: Direct materials $0.12 Direct labor 0.07 Variable overhead 0.11 Fixed overhead 0.25 Total cost $0.55 SportCardz has enough excess capacity to handle the special order. Requirements (1) Prepare an incremental analysis to determine whether SportCardz should accept the special sales order assuming fixed costs would not be affected by the special order. ACCEPT OR REJECT THE SPECIAL ORDER (2) Now assume that the Hall of Fame wants special hologram baseball cards. SportCardz will spend $5,400 to develop this hologram, which will be useless after the special order is completed. Should SportCardz accept the special order under these circumstance? Show your analysis. ACCEPT OR REJECT THE SPECIAL ORDER
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started