Louisville Corporation produces baseball bats for kids that it sells for $32 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:

1. Louisville should accept the one-time special order from Ripkin Corporation because the total revenue from the order would be $250,000 ($25 x 10,000), which is greater than the variable costs of producing and selling the bats (direct materials, direct manufacturing labor, and variable manufacturing overhead) of $160,000 ($16 x 10,000). This would result in a contribution margin of $90,000 ($250,000 - $160,000) to cover fixed costs and provide profit. 2a. On financial considerations alone, it depends on the contribution margin from the special order and the contribution margin lost from selling 10,000 fewer bats to regular customers. If the contribution margin from the special order is greater than the contribution margin lost from regular customers, then Louisville should accept the special order. 2b. Louisville would be indifferent between accepting the special order and continuing to sell to its regular customers at $32 per bat if the contribution margin from the special order is equal to the contribution margin from selling 10,000 bats to regular customers. This would be $6 per bat ($32 - $26) or $60,000 ($6 x 10,000). 2c. Louisville should consider other factors such as its capacity and ability to fulfill the special order without affecting regular customer orders, the potential for future orders from Ripkin Corporation or other customers, the impact on brand reputation and customer loyalty, and any ethical or environmental concerns related to producing and selling additional products.