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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby - Cardz with a special order. The Hall of Fame wishes to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby - Cardz with a special order. The Hall of Fame wishes to purchase 59,000 baseball card packs for a special promotional campaign and offers $0.27 per pack, a total of $15,930. Hobby - Cardz's total production cost is $0.47 per pack, as follows: (Click the icon to view the cost information.) Hobby - Cardz has enough excess capacity to handle the special order. Read the requirements. Requirement 1. Prepare a differential analysis to determine whether Hobby - 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 Requirement 1. Prepare a differential analysis to determine whether Hobby - 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 Expected in operating income Decision: Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hobby - Cardz will spend $5,500 to develop this hologram, which will be useless after the special order is completed. Should Hobby - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.27 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.) Expected increase in revenues Expected increase in expenses: Variable manufacturing cost: packs x Fixed manufacturing costs Expected increase in total expenses Data table
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