Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached

Global Sports Cards

with a special order. The Hall of Fame wants to purchase

59,000

baseball card packs for a special promotional campaign and offers

$0.41

per pack, a total of

$24,190.

Global Sports Cards's

total production cost is

$0.61

per pack, as follows:

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(Click the icon to view the cost information.)

Global Sports Cards

has enough excess capacity to handle the special order. Read the requirements

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.Requirement 1. Prepare an incremental analysis to determine whether

Global Sports Cards

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	(59,000 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

Decision:

Accept the special sales order.

Reject the special sales order.

Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards.

Global Sports Cards

must spend

$5,400

to develop this hologram, which will be useless after the special order is completed. Prepare an incremental analysis to determine whether

Global Sports Cards

should accept the special order under these circumstances. (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	(59,000 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

Decision:

Reject the special sales order.

Accept the special sales order.

Enter any number in the edit fields and then continue to the next question.