FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 54,000 baseball card packs for a
special promotional campaign and offers $0.40 per pack, a total of $21,600. World Wide Cards' total production cost is $0.60 per pack, as follows:
View the cost information.
World Wide Cards has enough excess capacity to handle the special order.
Read the requirements.
Cost information
-
Requirements
-
Variable costs:
Direct materials
Direct labor
0.14
0.09
Variable overhead
0.12
0.25
Fixed overhead.....
Total cost...
$
0.60
Print
Done
1. Prepare an incremental analysis to determine whether World Wide Cards
should accept the special sales order assuming fixed costs would not be
affected by the special order.
2. Now assume that the Hall of Fame wants special hologram baseball cards.
World Wide Cards must spend $5,500 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? Show your analysis.
Print
Done
pecial order.
expand button
Transcribed Image Text: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 54,000 baseball card packs for a special promotional campaign and offers $0.40 per pack, a total of $21,600. World Wide Cards' total production cost is $0.60 per pack, as follows: View the cost information. World Wide Cards has enough excess capacity to handle the special order. Read the requirements. Cost information - Requirements - Variable costs: Direct materials Direct labor 0.14 0.09 Variable overhead 0.12 0.25 Fixed overhead..... Total cost... $ 0.60 Print Done 1. Prepare an incremental analysis to determine whether World Wide Cards should accept the special sales order assuming fixed costs would not be affected by the special order. 2. Now assume that the Hall of Fame wants special hologram baseball cards. World Wide Cards must spend $5,500 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? Show your analysis. Print Done pecial order.
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