# Problem #1. Making special pricing decisions_Hall of Fame in Cooperstown

\$6.00

Category:

## Description

Problem
#1. Making special pricing decisions

Suppose
the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby-Cardz
with a special order. The Hall of Fame wishes to purchase 57,000 baseball card
packs for a special promotional campaign and offers \$0.41 per pack, a total of
\$23,370. Hobby-Cardzâ€™s total production cost is \$0.61 per pack, as follows:

Variable costs:

Direct materials \$ 0.13

Direct labor 0.06

Total cost \$ 0.61

Hobby-Cardz
has enough excess capacity to handle the special order.

Requirements

1.
Prepare a differential analysis to determine whether Hobby-Cardz should accept the
special sales order.

2.
Now assume that the Hall of Fame wants special hologram baseball cards. Hobby-Cardz
will spend \$5,900 to develop this hologram, which will be useless after the
special order is completed. Should Hobby-Cardz accept the special order under
these circumstances, assuming no change in the special pricing of \$0.41 per
pack?

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# Problem #1. Making special pricing decisions_Hall of Fame in Cooperstown

\$6.00

Category:

## Description

Problem
#1. Making special pricing decisions

Suppose
the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby-Cardz
with a special order. The Hall of Fame wishes to purchase 57,000 baseball card
packs for a special promotional campaign and offers \$0.41 per pack, a total of
\$23,370. Hobby-Cardzâ€™s total production cost is \$0.61 per pack, as follows:

Variable costs:

Direct materials \$ 0.13

Direct labor 0.06

Total cost \$ 0.61

Hobby-Cardz
has enough excess capacity to handle the special order.

Requirements

1.
Prepare a differential analysis to determine whether Hobby-Cardz should accept the
special sales order.

2.
Now assume that the Hall of Fame wants special hologram baseball cards. Hobby-Cardz
will spend \$5,900 to develop this hologram, which will be useless after the
special order is completed. Should Hobby-Cardz accept the special order under
these circumstances, assuming no change in the special pricing of \$0.41 per
pack?

## Reviews

There are no reviews yet.