Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectible Cards with a special order. The Hall of Fame wants to purchase 50,000 baseball card packs for a special promotional campaign and offers $0.43 per pack, a total of $21,500.

Collectible Cards's total production cost is $0.63 per pack, as follows:

Collectible Cards has enough excess capacity to handle the special order.

Variable costs:

Direct materials. . . . . . . . . . . . . ..$0.13

Direct labor. . . . . . . . . . . . . . . . . .0.08

Variable overhead. . . . . . . . . . . . .0.12

Fixed overhead. . . . . . . . . . . . . . .0.30

Total cost. . . . . . . . . . . . . . . . . . . $0.63

1.	Prepare an incremental analysis to determine whether Collectible Cards should accept the special sales order assuming fixed costs would not be affected by the special order.
2.	Now assume that the Hall of Fame wants special hologram baseball cards. Collectible Cards must spend $5,400 to develop this hologram, which will be useless after the special order is completed. Should Collectible Cards accept the special order under these circumstances? Show your analysis.

Total Order
Incremental Analysis of Special Sales Order Decision	Per Unit	(50,000 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

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