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What is the short-term effect on operating profit

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Question - 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.

1. What is the short-term effect on operating profit if BallCards accepts?

2. What are two important strategic issues that BallCards needs to consider in deciding whether to accept the special order?

Reference no: EM132499016

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