Your answer is partially correct. After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered some fıre damage and is unable to ship the bakery's order of 11,200 boxes this month. The bakery's owner is asking if Blossom can fill a onetime rush order of 11,200 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expedite the order. If Blossom accepts the order, it will incur $ 820 in export taxes and shipping. Calculate the Profit on special order. 2$ Profit on special order 783 Should Blossom accept the London bakery's offer? Blossom should * accept the special order.
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- Crane Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company’s major product lines is custom-printed cake boxes that are sold to some of the country’s best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Crane uses a thick premium coated paper for all of its cake boxes. Based on annual production of 1,000,000 boxes, Crane’s cost for producing a box is as follows: Paper $0.15 Ink 0.05 Direct labor 0.05 Variable overhead 0.09 Fixed overhead 0.09 Total cost per box $0.43 Kimberly Young, a recent graduate of the Culinary Institute of America, is opening a new bakery in her hometown. She recently contacted Brad Lail, Crane’s top salesperson, about purchasing cake boxes for her new store. Brad described Crane’s boxes, emphasizing the high-quality paper and the unique printing process the company uses. Andrea is looking for ways to lower her operating costs, so…HighValu Incorporated manufactures a moderately priced set of lawn furniture (a table and four chairs) that it sells for $270. The company currently manufactures and sells 6, 900 sets per year. The manufacturing costs include $94 for direct materials and $54 for direct labor per set. The overhead charge per set is $44, which consists entirely of fixed costs. Highvalu is considering a special purchase offer from a large retail firm, which has offered to buy 690 sets per year for three years at a price of $186 per set. Highvalu has the available plant capacity to produce the order and expects no other orders or profitable alternative uses of the plant capacity. Required: 1. What is the total relevant cost per unit to produce the units requested by the retail firm? 2. What is the estimated net effect on annual operating income if Highvalu accepts the special sales order?Deli's Fudge Factory currently makes fudge for retail and mail order customers. It also offers a variety of roasted nuts. Fudge sales have increased over the past year, so Deli is considering outsourcing the roasted nuts and using the roasting space to make additional fudge. A reliable supplier has quoted a price of £0.85 per pound for the roasted nuts. The following amounts reflect the in-house manufacturing costs per pound for the roasted nuts: Direct materials Direct labour Unit-related support costs Batch-related support costs Product-sustaining support costs Facility-sustaining support costs Total cost per pound £0.50 0.06 0.10 0.04 0.05 0.15 £0.90 Required: Should Deli's Fudge Factory outsource the roasted nuts? Why or why not? Discuss all items that should be considered. a.
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