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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles and More with a special order. The Hall of Fame wants to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles and More with a special order. The Hall of Fame wants to purchase 53,000 baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of $16,960. Collectibles and More's total production cost is $0.52 per pack, as follows: (Click the icon to view the cost information.) Requirements 1. Prepare an incremental analysis to determine whether Collectibles and More 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. Collectibles and More must spend $5,100 to develop this hologram, which will be useless after the special order is completed. Should Collectibles and More accept the special order under these circumstances? Show your analysis. Collectibles and More has enough excess capacity to handle the special order. Total Order Incremental Analysis of Special Sales Order Decision Per Unit (53,000 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 Enter any number in the edit fields and then click Check Answer. Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles and More with Requirements a special order. The Hall of Fame wants to purchase 53,000 baseball card packs for a special promotional 1. Prepare an incremental analysis to determine whether Collectibles and More should accept the spec campaign and offers $0.32 per pack, a total of $16,960. Collectibles and More's total production cost is sales order assuming fixed costs would not be affected by the special order. $0.52 per pack, as follows: 2. Now assume that the Hall of Fame wants special hologram baseball cards. Collectibles and More m (Click the icon to view the cost information.) spend $5,100 to develop this hologram, which will be useless after the special order is completed. Should Cohi ances? Show your Collectibles and More has enough excess capacity to handle the special order. analysis. A Data Table Total Order Incremental Analysis of Special Sales Order Decision Per Unit (53,000 units) - X Revenue from special order Less variable expense associated with the order: 0.11 Variable manufacturing costs 0.06 Contribution margin Variable costs: Direct materials ................ $ Direct labor ................ Variable overhead ............ Fixed overhead ... $ Total cost ... 0.10 0.25 Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order 0.52 0. Total cost ..........................= Enter any number in the edit fields and then click Check Answer. Print Done
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