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Suppose the Baseball Hall of Fame in Cooperstown, New Collectibles & More's total production cost is York, has approached Collectibles & More with a special
Suppose the Baseball Hall of Fame in Cooperstown, New Collectibles & More's total production cost is York, has approached Collectibles & More with a special $0.52 per pack, as follows: order. The Hall of Fame wants to purchase 53,000 (Click the icon to view the cost baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of $16,960. information.) Collectibles & More has enough excess capacity to handle the special order. Requirement 1. Prepare an incremental analysis to determine whether Collectibles & More should accept the special sales order assuming fixed costs would not be affected by the special order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (53,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special orderData table Variable costs: Direct materials $ 0. 11 Direct labor 0.06 Variable overhead 0.10 0.25 Fixed overhead. . . . . $ 0.52 Total cost . . .X Requirements 1. Prepare an incremental analysis to determine whether Collectibles & More 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. Collectibles & More must spend $5,100 to develop this hologram, which will be useless after the special order is completed. Should Collectibles & More accept the special order under these circumstances? Show your analysis
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