Suppose the baseball hall of fame in cooperstown, new york, has approached Rec-Cardz with a special order. The hall of fame wishes to purchase 54,000 baseball card packs for a special promotional campaign that offers $0.38 per pack, a total of $20,520. Rec-Cardz's total production cost is $0.58 per pack, as follows:

Variable costs:

Direct Materials.....$0.11

Direct Labor.....0.07

Variable overhead.....0.10

Fixed Overhead.....0.30

Total Cost...............$0.58

Rec-Cardz has enough excess capacity to handle the special order

Recquirement 1: Prepare incremental analysis to determine whether Rec-Cardz should accept the special sales order assuming fixed costs would not be affected by the special order. (Enter "0" for any zero balances. Use parenthesis or a minus sign to indicate a decrease in operating income from the special order.)

Per Unit Total Order (54,000 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 order _______________________

Requirement 2: Now assume that the hall of fame wants special hologram baseball cards. Rec-Cardz must spend $4,700 to develop this hologram which will be useless after the special order is completed. Prepare an incremental analysis to determine whether Rec-Cardz should accept the special order under these circumstances. (Enter "0" for any zero balances. Use parenthesis or a minus sign to indicate a decrease in operating income from the special order.)

Per unit Total Order (54,000 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 order _______________________