Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby Cardz with a special order. The Hall of Fame wants to purchase baseball card packs for a special promotional campaign and offers $ per pack, a total of $
Hobby Cardz's total production cost is $ per pack, as follows:
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Hobby Cardz has enough excess capacity to handle the special order.
Read the requirements.
Requirement Prepare an incremental analysis to determine whether Hobby Cardz should accept the special sales order assuming fixed costs would not be affected by the special order. Enter a for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.
Incremental Analysis of Special Sales Order Decision Per Unit
tableTotal Order 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
