Maurice Tutor

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Teaching Since: May 2017
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Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 10 Oct 2017 My Price 10.00

BallCards Inc.

11-47    Special Order BallCards Inc. sells baseball cards in packs of 15 in drugstores 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 total order. Each set will consist of 33 cards. Ball- Cards currently produces cards in sheets of 132.

 

Production, marketing, and other costs (per sheet)

Direct materials                                                        $ 1.20

Direct labor                                                        0.20

Variable overhead                                               0.40

Fixed overhead                                                   0.15

Variable marketing                                              0.10

Fixed marketing                                                  0.35

Insurance, taxes, and administrative salaries           0.10

Costs for special order

Design                                                                 2,000

Other setup costs                                                        5,500

 

 

 

 

 

 

 

 

BallCards would incur no marketing costs for the special order. It has the capacity to accept this order without interrupting regular production.

Required

1.    Should Ballcards accept the special order? Support your answer with appropriate computations.

2.    What are the important strategic issues in the decision?

 

Answers

Maurice Tutor
(5)
Status NEW Posted 10 Oct 2017 01:10 PM My Price 10.00

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