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 Cards with a special order. The Hall of Fame wants to purchase 59,000 baseball card packs for a special promotional campaign and offers $0.42 per pack, a total of $24,780 order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (59,000 units) 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 Decision: Requirement 2. Now assume that the Hall of Fame wants special hologram baseball cards. World Wide Cards must spend $4,700 to develop this hologram, whi under these circumstances. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special orde Total Order Incremental Analysis of Special Sales Order Decision PerUnit (59,000 units) 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 Decision Enter any number in the edit fields and then continue to the next question

Explanation / Answer

Per unit Total order Revenue from special order 0.42 24780 Less variable expense associated with the order Variable manufacturing costs 0.32 18880 Contribution margin 0.1 5900 Less: Additional fixed expenses associated with the order 0 Increase(decrease) in operating income from special order 5900 Decision: Accept the order 2 Per unit Total order Revenue from special order 0.42 24780 Less variable expense associated with the order Variable manufacturing costs 0.32 18880 Contribution margin 0.1 5900 Less: Additional fixed expenses associated with the order 4700 Increase(decrease) in operating income from special order 1200 Decision: Accept the order

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