Learning Objective 2 E25 10 Making special pricing decisions Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached 1. $5,700 Hobby Cardz with a special order. The Hall of Fame wishes to purchase 57,000 baseball card packs for a special promotional campaign and offers $0.41 per pack, a. total of $23,370.1 lobby Can1is total production cost is $0.61 per pack, as follow
Variable costs: Direct materials S 0.13 Direct labor 0.06 Variable overhead 0.12 Road overhead 0_30 Total cost $ 0.61
Hobby Cardz has enough excess capacity to handle the special order,
Requirements 1. Prepare a differential analysis to determine whether Hobby Caxdz should accept the special sales order. 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hobby Cardz will spend $5,900 to develop this hologram, which will be use less after the spacial order is completed. Should Hobby7Catdz, accept the special order under these circommances; assuming no &Irwin die special pridng of $0.41 per pack?
Short Term Business Decisions 161′
Learning Objective 2
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