Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles & 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. Requirement 1. Prepare an incremental analysis to determine whether Collectibles & More should accept the special sales order assuming fixed costs would not be affected by the special order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Incremental Analysis of Special Sales Order Decision 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 Per Unit Collectibles & More's total production cost is $0.52 per pack, as follows: (Click the icon to view the cost information.) Collectibles & More has enough excess capacity to handle the special order. Read the requirements. Total Order (53,000 units)
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collectibles & 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. Requirement 1. Prepare an incremental analysis to determine whether Collectibles & More should accept the special sales order assuming fixed costs would not be affected by the special order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Incremental Analysis of Special Sales Order Decision 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 Per Unit Collectibles & More's total production cost is $0.52 per pack, as follows: (Click the icon to view the cost information.) Collectibles & More has enough excess capacity to handle the special order. Read the requirements. Total Order (53,000 units)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Data table
Variable costs:
Direct materials
Direct labor
Variable overhead
Fixed overhead....
Total cost...
$
I
0.11
0.06
0.10
0.25
$ 0.52
X
her
to
Requirements
1. Prepare an incremental analysis to determine whether Collectibles & 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 & More must spend $5,100 to develop this hologram, which will be
useless after the special order is completed. Should Collectibles & More accept
the special order under these circumstances? Show your analysis.
Transcribed Image Text:Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached
Collectibles & 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.
Requirement 1. Prepare an incremental analysis to determine whether Collectibles & More should accept the special sales order assuming fixed costs would not be affected by the special order.
(Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.)
Incremental Analysis of Special Sales Order Decision
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
Per Unit
Collectibles & More's total production cost is $0.52 per pack, as follows:
(Click the icon to view the cost information.)
Collectibles & More has enough excess capacity to handle the special order.
Read the requirements.
Total Order
(53,000 units)
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