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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles and More with a special order. The Hall of Fame wants to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles and More with a special order. The Hall of Fame wants to purchase 53,000 baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of S16,960. Collectibles and More's total production cost is $0.52 per pack, as follows. Requirements 1. Prepare an incremental analysis to determine whether Collectibles and More should accept the special sales order assuming fixed costs would not be affected by the special order (Click the icon to view the cost information.) 2. Now assume that the Hall of Fame wants special hologram baseball cards. Collectibles and More must spend $5,100 to develop this hologram, which will be useless after the special order is completed. Should Collectibles and More accept the special order under these circumstances? Show your analysis. Collectibles and More has enough excess capacity to handle the special order Requirement 1. Prepare an incremental analysis to determine whether Collectibles and More 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.) Total Order Data Table Incremental Analysis of Special Sales Order Decision Per Unit (53,000 units) Revenue from special order 0.41 21730 Less variable expense associated with the order Variable costs: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Direct materials Direct labor Variable overhead S 0.11 0.06 0.10 0.25 0.52 Fixed overhead Total cost Print Done
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