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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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
|
0.11
|
|
Fixed overhead
|
0.25
|
|
Total cost
|
$0.59
|
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