Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Collector-Cardz with a special order. The Hall of Fame wishes to purchase 56,000 baseball card packs for a special promotional campaign and offers $0.38 per pack, a total of $21,280.
Collector-Cardz's total production cost is $0.58 per pack, as follows
(Click the icon to view the cost information.)
Collector-Cardz has enough excess capacity to handle the special order.
Requirement 1. Prepare a differential analysis to determine whether Collector-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 \times
Expected
in operating income
Data table
Variable costs
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total cost
$ 0.11
0.09
0.08
0.30
0.58
