Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby Memorabilia with a special order. The Hall of Fame wants to purchase $57,000$ baseball card packs for a special promotional campaign and offers $$0\mathrm{.}42$ per pack, a total of $$23,940.$

Hobby Memorabilia's total production cost is $$0\mathrm{.}62$ per pack, as follows:

$($Click the icon to view the cost information.$)$

Hobby Memorabilia has enough excess capacity to handle the special order.

Read the requirements.

Requirement $1.$ Prepare an incremental analysis to determine whether Hobby Memorabilia 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.$)$

$,$ Incremental Analysis of Special Sales Order Decision

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

Requirement $2.$ Now assume that the Hall of Fame wants special hologram baseball cards. Hobby Memorabilia must spend $$5,500$ to develop this hologram, which will be useless after the special order is completed. Prepare an incremental analysis to determine whether Hobby Memorabilia 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.$)$