Posted: April 10th, 2016

# Prepare an incremental analysis to determine whether Active-Cardz should accept the special sales order?

Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Active-Cardz with a special order. The Hall of Fame wishes to purchase 50,000 base-ball card packs for a special promotional campaign and offers \$0.37 per pack, a total of \$18,500. Active-Cardz’s total production cost is \$0.57 per pack, as follows:

Variable costs:

Direct Materials \$0.14
Direct Labor 0.07
Total Cost \$0.57

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

Requirements:

1. Prepare an incremental analysis to determine whether Active-Cardz should accept the special sales order.

2. Now assume that the Hall of Fame wants special hologram baseball cards. Active-Cardz will spend \$5,800 to develop this hologram, which will be useless after the special order is completed. Should Active-Cardz accept the special order under these circumstances?

Please see attached for the full question set.

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