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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 51000 baseball card packs for a special promotional campaign and offers $.34 per pack, a total of 17340.

Requirement 1. 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. (E a minus sign to indicate a decrease in operating income from the special order.) Total Order Per Unit (51,000 units) Incremental Analysis of Special Sales Order Decision 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 Data table Variable costs: $ 0.11 Direct materials Direct labor Variable overhead 0.08 0.10 0.25 Fixed overhead .. $ 0.54 Total cost ..... Requirements 1. 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. 2. Now assume that the Hall of Fame wants special hologram baseball cards. Hobby - Cardz must spend $4,900 to develop this hologram, which will be useless after the special order is completed. Should Hobby-Cardz accept the special order under these circumstances? Show your analysis

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