Wantum - Cardz's total production cost is $0.60 per pack, as follows: Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Wantum - Cardz with a special order. The Hall of Fame wishes to purchase 54,000 baseball card packs for a special promotional campaign and offers $0.40 per pack, a total of $21,600. E (Click the icon to view the cost information.) Wantum - Cardz has enough excess capacity to handle the special order. Read the requirements. Requirement 1. Prepare a differential analysis to determine whether Wantum - 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: - X - X Data table $5, Requirements Requirem the specia Start by pr Accept the special sales order. hes 1. Prepare a differential analysis to determine whether Wantum- Cardz should accept the special sales order. Variable costs: Expecte Reject the special sales order. Direct materials %24 0.15 2. Now assume that the Hall of Fame wants special hologram baseball cards. Wantum - Cardz will spend $5,600 to develop this hologram, which will be useless after the special order is completed. Should Wantum - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.40 per pack? Expecte Direct labor 0.10 Variable manufacturing cost: Variable overhead 0.10 packs x 0.25 Fixed overhead Fixed manufacturing costs 0.60 Total cost
Wantum - Cardz's total production cost is $0.60 per pack, as follows: Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Wantum - Cardz with a special order. The Hall of Fame wishes to purchase 54,000 baseball card packs for a special promotional campaign and offers $0.40 per pack, a total of $21,600. E (Click the icon to view the cost information.) Wantum - Cardz has enough excess capacity to handle the special order. Read the requirements. Requirement 1. Prepare a differential analysis to determine whether Wantum - 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: - X - X Data table $5, Requirements Requirem the specia Start by pr Accept the special sales order. hes 1. Prepare a differential analysis to determine whether Wantum- Cardz should accept the special sales order. Variable costs: Expecte Reject the special sales order. Direct materials %24 0.15 2. Now assume that the Hall of Fame wants special hologram baseball cards. Wantum - Cardz will spend $5,600 to develop this hologram, which will be useless after the special order is completed. Should Wantum - Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.40 per pack? Expecte Direct labor 0.10 Variable manufacturing cost: Variable overhead 0.10 packs x 0.25 Fixed overhead Fixed manufacturing costs 0.60 Total cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:- Cardz's total production cost is $0.60 per pack, as follows:
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Wantum - Cardz with a special order.
The Hall of Fame wishes to purchase 54,000 baseball card packs for a special promotional campaign and offers $0.40
per pack, a total of $21,600.
Wantum
(Click the icon to view the cost information.)
Wantum - Cardz has enough excess capacity to handle the special order.
Read the requirements.
.....
Requirement 1. Prepare a differential analysis to determine whether Wantum - 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:
- X
Data table
$5,
Requirements
Requirem
the specia
n- Cardz ac
Start by pr
Accept the special sales order.
hes
1. Prepare a differential analysis to determine whether Wantum - Cardz should
accept the special sales order.
Variable costs:
Expecte
Reject the special sales order.
Direct materials
0.15
2. Now assume that the Hall of Fame wants special hologram baseball cards.
Wantum - Cardz will spend $5,600 to develop this hologram, which will be
useless after the special order is completed. Should Wantum - Cardz accept
the special order under these circumstances, assuming no change in the
special pricing of $0.40 per pack?
Expecte
Direct labor
0.10
Variable manufacturing cost:
Variable overhead
0.10
packs x
0.25
Fixed overhead
Fixed manufacturing costs
$
0.60
Total cost
Eypooted inorease in totol oxnenses
%24
Transcribed Image Text:Data table
Requirements
Suppos
The Ha
per pad
Variable costs:
1. Prepare a differential analysis to determine whether Wantum - Cardz should
accept the special sales order.
Direct materials
$
0.15
2. Now assume that the Hall of Fame wants special hologram baseball cards.
Wantum - Cardz will spend $5,600 to develop this hologram, which will be
useless after the special order is completed. Should Wantum - Cardz accept
the special order under these circumstances, assuming no change in the
special pricing of $0.40 per pack?
Direct labor
0.10
Requir
Variable overhead
0.10
0.25
Expe
Fixed overhead
Expe
0.60
Total cost
Print
Done
Expe
Print
Done
Decisid
Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. Wantum - Cardz will spend $5,600 to develop this hologram, which will be useless after the special order is completed. Should Wantum - Cardz accep
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:
packs x
Fixed manufacturing costs
Expected increase in total expenses
Expected
in operating income
Decision:
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