2024 – Suppose the Baseball Hall of Fame in Cooperstown New York has approached Hobby Cardz E25 10 Making special pricing decisions

Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hobby-Cardz

 

E25-10 Making special pricing decisions

 

E25-10 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-Cardz’s total production cost is $0.61 per pack, as follows:

 

Variable costs:

Direct materials            $ 0.13

Direct labor                  0.06

Variable overhead       0.12

Fixed overhead                        0.30

       Total cost              $ 0.61

 

 

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