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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Alley - Cardz with a special order. The Hall of Fame wishes to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Alley - Cardz with a special order. The Hall of Fame wishes to purchase 59,000 baseball card packs for a special promotional campaign and offers $0.38 per pack, a total of $22,420. Alley - Cardz's total production cost is $0.58 per pack, as follows: (Click the icon to view the cost information.) Alley - Cardz has enough excess capacity to handle the special order. Read the requirements. ,UUU packS X D U.35 2,950 Expected increase in operating income Decision: Accept the special sales order. Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. Alley - Cardz will spend $5,900 to develop this hologram, which will be useless after the special order is completed. Should Alley - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.38 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.) Data Table - Expected increase in revenues Expected increase in expenses: Variable manufacturing cost: Variable costs: Direct materials 0.16 packs * Direct labor 0.08 Fixed manufacturing costs Variable overhead 0.09 Expected increase in total expenses 0.25 Fixed overhead Expected in operating income $ 0.58 Total cost
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