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Business, 04.08.2020 06:01 lmh40

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 51,000 baseball card packs for a special promotional campaign and offers $0.33 per pack, a total of $16,830. World Wide Cards's total production cost is $0.53 per pack, as follows:Variable costs: Direct materials $0.13Direct labor 0.04Variable overhead 0.11Fixed overhead 0.25Total cost $0.53World Wide Cards has enough excess capacity to handle the special order. Required:Prepare an incremental analysis to determine whether World Wide Cards should accept the special sales order assuming fixed operating income from the special order. b. Now assume that the Hall of Fame wants special hologram baseball cards. World Wide Cards will spend $5,000 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, assuming no change in the special pricing of $0.33 per pack?

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