12.07.2022 - 17:13

# Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Tiger – Cardz with a special order. The Hall of Fame wishes to purchase 57,000 baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of$18,240.

Question:

Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Tiger – Cardz with a special order. The Hall of Fame wishes to purchase 57,000 baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of$18,240.

Tiger- Cardz’s total production cost is $0.52 per pack, as follows:  Variable costs: Direct materials$0.14 Direct labor 0.04 Variable overhead 0.09 Fixed overhead 0.25 Total cost $0.52 Tiger-Cardz has enough excess capacity to handle the special order. Prepare a differential analysis to determine whether Tiger – Cardz should accept the special sales order. Answers (1) • April 18, 2023 в 10:05 Based on the information provided, Tiger-Cardz should accept the special sales order from the Baseball Hall of Fame. Differential analysis is a technique used to analyze the potential impact of a decision by comparing the costs and benefits of different alternatives. In this case, we need to compare the costs and benefits of accepting the special sales order versus not accepting it. The total cost of producing each pack of baseball cards is$0.52, while the Hall of Fame is offering $0.32 per pack. This means that the company would incur a loss of$0.20 per pack if they accept the order. However, since Tiger-Cardz has enough excess capacity to handle the special order, there will not be any additional fixed costs incurred. Therefore, the incremental cost of producing the 57,000 baseball card packs would be the variable costs of $0.27 per pack ($0.14 + $0.04 +$0.09). The incremental revenue from the special order would be $0.32 per pack. Thus, the incremental profit from accepting the special order would be$0.05 per pack ($0.32 -$0.27). The total incremental profit from the special order would be $2,850 ($0.05 x 57,000). Since the incremental profit from accepting the special order is positive, Tiger-Cardz should accept the order. By doing so, the company would be able to utilize its excess capacity and earn additional profit without incurring any additional fixed costs.
Find the right answer to the question Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Tiger – Cardz with a special order. The Hall of Fame wishes to purchase 57,000 baseball card packs for a special promotional campaign and offers $0.32 per pack, a total of$18,240. by subject Accounting, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.