Question
In: Accounting
BallCards Inc. sells baseball cards in packs of 15 in drugstores and convenience stores throughout the...
BallCards Inc. sells baseball cards in packs of 15 in drugstores and convenience stores throughout the country. It is the third leading firm in the industry. BallCards has been approached by Pennock Cereal Inc., which would like to order a special edition of cards to use as a promotion with its cereal. BallCards would be solely responsible for designing and producing the cards. Pennock wants to order 25,000 sets and has offered $23,750 for the order. Each set will consist of 33 cards. BallCards currently produces cards in sheets of 132. Production, marketing, and other costs (per sheet): Variable costs (per sheet) Direct materials $1.20 Direct labor 0.20 Variable overhead 0.40 Variable marketing 0.10 Fixed costs (average per sheet) Fixed overhead 0.15 Fixed marketing 0.35 Insurance, taxes, and administrative salaries 0.10 Costs for special order (total): Design 2,000 Order setup costs 5,500 BallCards would incur no marketing costs for the special order. It has the capacity to accept this special order without interrupting regular production.
1. Is the current operating profit relevant in BallCards’ decision on whether to accept the special order? Why or why not?
2. What are the number sheets that BallCards must produce for the special order?
3. What is the short-term effect on operating profit if BallCards accepts the special order?
4. What special order offer price by Pennock would allow BallCards to breakeven on the order?
5. Briefly discuss two important strategic issues that BallCards needs to consider in deciding whether to accept the special order.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Accounting Problem BallCards Inc. sells baseball cards in packs of 15 in drugstores and convenience stores...
Accounting Problem
BallCards Inc. sells baseball cards in packs of 15 in drugstores
and convenience stores throughout the country. It is the third
leading firm in the industry. BallCards has been approached by
Pennock Cereal Inc., which would like to order a special edition of
cards to use as a promotion with its cereal. BallCards would be
solely responsible for designing and producing the cards. Pennock
wants to order 25,000 sets and has offered $23,750 for the order.
Each set...
SportsCards Inc. manufactures baseball cards sold in packs of 10 in drugstores and grocery stores throughout...
SportsCards Inc. manufactures baseball cards sold in packs of 10
in drugstores and grocery stores throughout the country. It is the
second leading firm in an industry with four major firms.
SportsCards has been approached by Zip Cereal Inc., which would
like to order a special edition of cards to use as a promotion with
its new cereal. SportsCards would be solely responsible for
designing and producing the cards. Zip wants to order 30,000 sets
and has offered $25,500 for...
Ashley Stores, Inc., sells gift cards for use at its stores. The following data pertains to...
Ashley Stores, Inc., sells gift cards for use at its stores. The
following data pertains to 2019, 2020, and 2021, the company’s
first three years of operation: 2019 2020 2021 Gift card sales $
30,000 $ 45,000 $ 50,000 Gift card usage 12,000 28,000 37,000 As of
December 31, 2019, Ashley estimates that 1.0% of its gift cards
will never be redeemed. As of December 31, 2020, Ashley has revised
its estimate, and now believes 1.5% of all gift cards,...
A company that sells baseball cards claims that 40% of the cards are rookies, 50% are...
A company that sells baseball cards claims that 40% of the cards
are rookies, 50% are veterans, and 10% are all stars. Suppose a
random sample of 100 cards has 55 rookies, 40 veterans, and 5
all-stars.
Card Type
Observed Frequency O
Expected Frequency E
O-E
(O-E)2
(O-E)2
E
Rookie
Veteran
All-Star
Test the company's claim using a 0.01 level of significance. You
may use the empty columns of the table above to assist you.
a) State the null and...
Data collected by a price reporting agency from more than 90,000 gasoline and convenience stores throughout...
Data collected by a price reporting agency from more than 90,000
gasoline and convenience stores throughout the U.S. showed that the
average price for a gallon of unleaded gasoline was $3.28. The
following data show the price per gallon ($) for a sample of 20
gasoline and convenience stores located in San Francisco.
3.59
3.59
4.59
3.76
3.75
3.71
3.65
3.80
3.55
3.36
3.57
3.79
3.55
4.19
3.95
3.46
3.83
3.93
3.41
3.37
a) Use the sample data to estimate...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
TimmyL Baseball Card Co. buys and sells baseball cards of a famous (ex) San Francisco Giants...
TimmyL Baseball Card Co. buys and sells baseball cards of a
famous (ex) San Francisco Giants baseball player. The company was
formed in 2015. The post-closing trial balance of that company for
the end of operations in that first year is:
TimmyL Baseball Card Co.
Trial Balance
December 31, 2015
Account
Debit
Credit
Cash
$250,000
Accounts
Receivable
80,000
Allowance for Bad
Debts
$ 8,000
Inventory
600,000
Supplies
10,000
Prepaid
Advertising
9,000
Land
200,000
Building
500,000
Accumulated
Depreciation-B. ...
The monopolist: "You Can't Handle the Ruth" sells baseball cards. It has a fixed cost of...
The monopolist: "You Can't Handle the Ruth" sells baseball
cards. It has a fixed cost of $5000 in rent, and a variable cost
of
2Q. Q is t he number of baseball cars which are sold. The firm
faces a market demand curve of P=200-Q.
What is the firms profits maximizing equilibrium?
How much profits is the firm making?
Should it stay open or shut down?
15) Wolf society, packs, and ecology have been studied extensively at different locations throughout the world....
15) Wolf society, packs, and ecology have been
studied extensively at different locations throughout the world.
Sex ratios for 7 study sites in Northern Europe are shown
below.
Site No.
% Males (Winter)
%Males (Summer)
1
71
54
2
48
51
3
89
72
4
57
46
5
62
55
6
50
49
7
58
44
It is hypothesized that in winter "loner" males (not present in
summer packs) join the pack to increase survival rate. Use a 5%
level...
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