Suppose the Baseball Hall of Fame in Cooperstown, New York, has approachedRec−Cardzwith a special order. The Hall of Fame wishes to purchase53,000baseball card packs for a special promotional campaign and offers$0.39per pack, a total of$20,670.1.Prepare a differential analysis to determine whetherRec−Cardzshould accept the special sales order.2.Now assume that the Hall of Fame wants special hologram baseball cards.Rec−Cardzwill spend$5,800to develop this hologram, which will be useless after the special order is completed. ShouldRec−Cardzaccept the special order under these circumstances, assuming no change in the special pricing of$0.39per pack?Rec−Cardz'stotal production cost is$0.59per pack, as follows:Variable costs: Direct materials$0.13Direct labor0.10Variable overhead0.11Fixed overhead0.25Total cost$0.59

Fixed overhead is an irrelevant cost as it will no increase for the special order. Only those costs…

Answered: Suppose the Baseball Hall of Fame in…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...

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Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached

Rec−Cardz

with a special order. The Hall of Fame wishes to purchase

53,000

baseball card packs for a special promotional campaign and offers

$0.39

per pack, a total of

$20,670.

1.	Prepare a differential analysis to determine whether Rec−Cardz should accept the special sales order.
2.	Now assume that the Hall of Fame wants special hologram baseball cards. Rec−Cardz will spend $5,800 to develop this hologram, which will be useless after the special order is completed. Should Rec−Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.39 per pack?

Rec−Cardz's

total production cost is

$0.59

per pack, as follows:

Variable costs:
Direct materials	$0.13
Direct labor	0.10
Variable overhead	0.11
Fixed overhead	0.25
Total cost	$0.59

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