1. Suppose GamesAhoy is currently producing and selling 40,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. FieldTactics Corporation wants to place a one-time special order for 10,000 bats at $23 each. Slugger will incur no variable selling costs for this special order. Should GamesAhoy accept this one-time special order? Show your calculations.

2. Now suppose GamesAhoy is currently producing and selling 50,000 bats. If GamesAhoy accepts FieldTactics offer it will have to sell 10,000 fewer bats to its regular customers. (a) On financial considerations alone, should GamesAhoy accept this one-time special order? Show your calculations. (b) On financial considerations alone, at what price would GamesAhoy be indifferent between accepting the special order and continuing to sell to its regular customers at $36 per bat. (c) What other factors should GamesAhoy consider in deciding whether to accept the one-time special order?

11-34 Special order, short-run pricing. Games Ahoy Corporation produces cricket bats for kids that it sellsfor $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: Cost per Bat Total Costs Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total costs $13 5 2 6 3 2 $31 $ 650,000 250,000 100,000 300,000 150,000 100,000 $1,550,000