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

Question

Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached World Wide CardsWorld Wi with a special order. The Hall of Fame wants to purchase 54,000 baseball card packs for a special promotional campaign and offers $0.37 per pack, a total of $19,980. E (C World Wi1. Prepare an incremental analysis to determine whether World Wide Cards Read t 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. World Wide Cards must spend $5,200 to develop this hologram, which will be useless after the special order is completed. Should World Wide Cards accept the special order under these circumstances? Show your analysis Requirement 1. Prepare an incremental analysis to determine whether World Wide Cards should accept the "for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the Total Order Incremental Analysis of Special Sales Order Decision Per Unit (54,000 units) Print Done Revenue from special order .37 19980 Less variable expense associated with the order Variable costs: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Direct materials Direct labor Variable overhead 0.09 0.10 0.25 0.57 Fixed overhead .. . Total cost Enter any number in the edit fields and then click Check Answer

Explanation / Answer

Requirement 1 Incremental analysis of Special sales Order decision per unit total order (54000units) Revenue from special order 0.37 19980 less variable expense associated with order Variable manufacturing costs 0.32 17280 Contribution margin 0.05 2700 less:Addittional fixed expense 0 increase(Decrease) in operating income 2,700 Requirement 2 Incremental analysis of Special sales Order decision per unit total order (54000units) Revenue from special order 0.37 19980 less variable expense associated with order Variable manufacturing costs 0.32 17280 Contribution margin 0.05 2700 less:Addittional fixed expense 5,200 increase(Decrease) in operating income -2,500

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