Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached ActiveCardz with a special order. The Hall of Fame wishes to purchase 56,000 baseball card packs for a special promotional campaign and offers $0.41 per pack, a total of $22,960....

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Part 1 ActiveCardz's total production cost is $0.61 per pack, as follows:

Data table

Variable costs: Direct materials$0.16Direct labor0.07Variable overhead0.08Fixed overhead0.30Total cost$0.61

ActiveCardz has enough excess capacity to handle the special order.

Requirements

1.Prepare a differential analysis to determine whether ActiveCardz should accept the special sales order.2.Now assume that the Hall of Fame wants special hologram baseball cards. ActiveCardz will spend $5,700 to develop this hologram, which will be useless after the special order is completed. Should ActiveCardz accept the special order under these circumstances, assuming no change in the special pricing of $0.41 per pack?

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Part 1

Requirement 1. Prepare a differential analysis to determine whether ActiveCardz should accept the special sales order. (Enter decreases to profits with a parentheses or minus sign.)

Expected increase in revenues $22,960 Expected increase in expenses Variable manufacturing cost: 56,000packs $0.31 (17,360) Expectedincreasein operating income $5,600

Part 2

Decision: Accept the special sales order.

Part 3 Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. ActiveCardz will spend $5,700 to develop this hologram, which will be useless after the special order is completed. Should ActiveCardz accept the special order under these circumstances, assuming no change in the special pricing of $0.41 per pack?

Start by preparing the analysis with the additional cost for the special hologram. (Enter decreases to profits with a parentheses or minus sign.)

Expected increase in revenues 22960 Expected increase in expenses: Variable manufacturing cost: packs Fixed manufacturing costs Expected increase in total expenses Expected in operating income