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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby-Card: with a special order. The Hall of Fame wishes to purchase 5?,000

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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby-Card: with a special order. The Hall of Fame wishes to purchase 5?,000 baseball card packs for a special promotional campaign and offers $0.41 per pack, a total of $23,3?0. Hobbv-Cardz's total production cost is $0.61 per pack, as follows: Variable costs: Direct materials $ 0.13 Direct labor 0.06 Variable overhead 0.12 Fixed overhead 0.30 Total cost 55061 Hobby-Card: has enough excess capacity to handle the special order. Requirements 1. Prepare a differential analysis to determine whether Hobby-Card: should accept the special sales order. 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hobby-Card: will spend $4,?00 to develop this hologram, which will be useless after the special order is completed. Should Hobby-Card: accept the special order under these circumstances, assuming no change in the special pricing of $0.41 per pack? Fiber Systems manufactures an optical switch that it uses in its nal product. The switch has the following manufacturing costs per unit: Direct Materials $ 9.00 Direct Labor 1.50 Variable Overhead 5.00 Fixed Overhead 9.00 Manufacturing Product Cost $ 24.50 Another company has offered to sell Fiber Systems the switch for $18.50 per unit, in which 34,000 optical switches are needed. If Fiber Systems buys the switch from the outside supplier, the manufacturing Facilities that will be idled cannot be used for any other purpose, yet none of the xed costs are ayoidable. a. Prepare an outsourcing analysis to determine whether Fiber Systems should make or buy the switch. b. Suppose instead that Fiber Systems needs 34,000 optical switches. By Outsourcing them, Fiber Systems can use its idle space to manufacture another product that will contribute $220,000 to operating income. Additionally, machines used to produce optical can be rented to another manufacturer at $50,000 per year. Prepare an outsourcing analysis to determine whether Fiber Systems should make or buy the switch

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