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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Sports - Cardz with a special order. The Hall of Fame wishes to
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Sports - Cardz with a special order. The Hall of Fame wishes to purchase 56,000 baseball card packs for a special promotional campaign and offers $0.40 per pack, a total of $22,400. Sports - Cardz's total production cost is $0.60 per pack, as follows: (Click the icon to view the cost information.) Sports - Cardz has enough excess capacity to handle the special order. Read the requirements. Requirement 1. Prepare a differential analysis to determine whether Sports - 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. Sports - Cardz will spend $5,200 to develop this hologram, which will be useless after the special order is completed. Should Sports - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.40 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: Data Table packs x Fixed manufacturing costs Variable costs: Expected increase in total expenses $ 0.16 Direct materials Direct labor Expected in operating income 0.05 Variable overhead 0.14 Decision: Fixed overhead 0.25 $ 0.60 Total cost Print Done Choose from any list or enter any number in the input fields and then continue to the next
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