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X Cost information $ 0.15 0.09 Variable costs: Direct materials Direct labour Variable overhead Fixed overhead Total cost 0.14 0.21 $ 0.59 Print Done Suppose
X Cost information $ 0.15 0.09 Variable costs: Direct materials Direct labour Variable overhead Fixed overhead Total cost 0.14 0.21 $ 0.59 Print Done Suppose the Hockey Hall of Fame in Toronto has approached Star-Cardz with a special order. The Hall of Fame wants to purchase 61,000 hockey card packs for a special promotional campaign and offers $0.43 per pack, a total of $26,230. Star-Cardz's total production cost is $0.59 per pack, as follows: 3 (Click the icon to view the cost information.) Star-Cardz has enough excess capacity to handle the special order. Requirements ... Requirement 1. Prepare an incremental analysis to determine whether Star-Cardz should accept the special sales order assuming fixed costs would not be affected by the special order. (Use parentheses or a minus sign to enter a decrease in operating income.) Star-Cardz Incremental Analysis of Special Sales Order Expected increase in revenues Expected increase in expenses: Variable manufacturing costs Fixed manufacturing costs Total expected increase in expenses Expected increase (decrease) in operating income Star-Cardz should the special sales order because the operating income expected to Requirement 2. Now assume that the Hall of Fame wants special hologram hockey cards. Star-Cardz must spend $2,200 to develop this hologram, which will be useless after the special order is completed. Prepare an incremental analysis to determine whether Star-Cardz should accept the special order under these circumstances. (Use parentheses or a minus sign to enter a decrease in operating income.) Star-Cardz Incremental Analysis of Special Sales Order Expected increase in revenues Expected increase in expenses: Variable manufacturing costs Fixed manufacturing costs Total expected increase in expenses Expected increase (decrease) in operating income Star-Cardz should the special sales order under these circumstances because the operating income is expected to
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