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Suppose the Baseball Hall of Fame in Cooperstown. New York, has approached Hobby Memorabilia with a special order. The Hall of Fame wishes to purchase
Suppose the Baseball Hall of Fame in Cooperstown. New York, has approached Hobby Memorabilia with a special order. The Hall of Fame wishes to purchase 52,000 baseball card packs for a special promotional campaign and offers exist0.41 per pack, a total of exist21, 320. Hobby Memorabilia's total production cost is exist0.61 per pack, as follows: Hobby Memorabilia has enough excess capacity to handle the special order. Prepare an incremental analysis to determine whether Hobby Memorabilia should accept the special sales order assuming fixed costs would not be affected by the special order. Now assume that the Hall of Fame wants special hologram baseball cards. Hobby Memorabilia must spend exist5, 400 to develop this hologram, which will be useless after the special order is completed. Should Hobby Memorabilia accept the special order under these circumstances? Show your analysis. Prepare an incremental analysis to determine whether Hobby Memorabilia 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.)
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