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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hero - Cardz with a special order. The Hall of Fame wishes to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hero - Cardz with a special order. The Hall of Fame wishes to purchase 54,000 baseball card packs for a special promotional campaign and offers 80.36 per pack, a total of $19,440. Hero - Cardz's total production cost is $0.56 per pack, as follows: (Click the icon to view the cost information.) Hero - Cardz has enough excess capacity to handle the special order. Requirement 1. Prepare a differential analysis to determine whether Hero - Cardz should accept the special sales order. (Enter decreases to profits with a parentheses or minus sign.) Expected increase in revenues Expected increase in expenses Variable manufacturing cost packs x Expected in operating income Decision Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hero - Cardz will spend $5,900 to develop this hologram, which will be useless after the special order is completed. Should Hero - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.36 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.) x Data table Expected increase in revenues Expected increase in expenses Variable manufacturing cost Variable costs packs x Direct materials $ 0.11 Fixed manufacturing costs Direct labor Variable overhead 0.06 0.09 0.30 Expected increase in total expenses Fixed overhead Expected in operating income $ 0.56 Total cost Decision
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