Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory.
| Sales price per crate | $ | 24.00 | |
| Variable cost per crate: | |||
| Direct materials | 5.50 | ||
| Direct labor | 10.50 | ||
| Variable overhead | 3.90 | ||
| Fixed costs per month | $ | 107,000.00 | |
Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to pay Poppycrock $22 per crate for a special-order batch of 5,000 crates. The special-order popcorn would include a unique label with information about the Boys and Girls of Canada. The additional cost of the label is estimated at $1.00 per crate. In addition, the variable overhead for these special-order crates would decrease by $0.50 because there would be no distribution costs.
a. What is the incremental cost of creating a normal crate of popcorn? A special-order crate of popcorn? (Round your answers to 2 decimal places.)
b-1. What is the impact on Poppycrock's monthly operating profit if it accepts the offer and it is producing and distributing 30,000 normal crates per month?
b-2. What is the opportunity cost of not accepting the offer?
c-1. What is the impact on Poppycrock's monthly operating profit if it accepts the offer and it is producing and selling 35,000 normal crates per month?
c-2. What is the opportunity cost of accepting the offer?
Please explan step by step!!
Homework Answers
| Answer | ||
| a. | Incremental Cost of Creating a normal create of popcorn | $ 19.90 |
| incremental costs = All variable costs ( direct labor $5.50 + direct materials $10.5 + variable overhead $3.90) | ||
| special-order crate of popcorn | ||
| (All variable cost of normal create $19.9 + Additional cost of Special Label $1.00 -Distribution Cost $0.50 ) | $ 20.40 | |
| b 1. | Monthly Operating Profit If it accepts the offer and it is producing and distributing 30000 normal crates | |
| (Number of Crates Sold 30,000 x Contribution margin $4.1 - Fixed Expenses $1,07,000 ) | $ 16,000 | |
| Contribution margin = Sales - Variable cost | ||
| = $24 - $19.9 | ||
| = $4.1 | ||
| B2 | If Poppycrock accepts the special order: | |
| Contribution margin for the 5,000 crates for the Boys and Girls of Canada order to its monthly profit | ||
| ( $ 22- $ 20.4) X 5000 crates | $ 8,000 | |
| Monthly operating profit with the special order ( $ 16000+ $ 8000) | $ 24,000 | |
| Therefor, Opportunity Cost for not accepting the offer | $ 8,000 | |
| c.1 | impact on Poppycrock's monthly operating profit if it accepts the offer and producing 35000 crates | |
| Monthly Operating profit without special order = ( $ 24- $ 19.9) X 35000 crates - Fixed Cost $ 1,07,000 | $ 36,500 | |
| Monthly Operating profit with special order = [( $ 24- $ 19.9) X 30000 crates] + [($ 22 - $ 20.4) X 5000] - Fixed Cost $ 1,07,000 | ||
| = $ 123000 + $ 8000 -$ 107000 | $24,000 | |
| c.2 | Opportunity cost of accepting the offer when Poppycrock is operating at full capacity | |
| Differnce between monthly operating profit numbers ( $ 36,500 - $ 24,000) | $12,500 |
Add Answer to:
Poppycrock, Inc., manufactures large crates of microwaveable
popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 26.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.90 Fixed costs per month $ 114,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 26.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.50 Fixed costs per month $ 122,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following Information is available for the factory. $ 27.80 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 3.90 $113,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. 25.09 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 4.00 $101,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. $ 28.00 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 3.90 $112,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers...
The only thing I need to know is C-1 and C-2. Thank you! Poppycrock, Inc., manufactures...
The only thing I need to know is C-1 and
C-2. Thank you!
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate Variable cost per crate: Direct materials $ 24.00 5.50 Direct labor 10.50 Variable overhead 3.60 $120,000.00 Fixed costs per month Boys and Girls of Canada is a...
Help Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main...
Help Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory $ 40 Sales price per case Variable cost per case: Direct materials Direct labor Variable overhead & sales commissions Fixed costs per month 12 3 10 $ 60,000 Wildwood Camps is a youth organization that serves hot chocolate at its camping facilities throughout Montana....
1021-1, LO21-2, LO21-3, Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants....
1021-1, LO21-2, LO21-3, Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory. 021-4 EXERCISE 21.5 Soal Order Decisions and Ipportunity Costs $40 Sales price per case Variable cost per crate: Direct materials Direct labor Variable overhead & sales commissions Fixed costs per month 12 3 10 $60,000 Wildwood Camps is a youth organization that...
Special Order; Opportunity Cost Alton Inc. is working at full production capacity producing 20,000 units of...
Special Order; Opportunity Cost Alton Inc. is working at full production capacity producing 20,000 units of a unique 11-23 product. Manufacturing costs per unit for the product are as follows: $9 Direct materials Direct labor Manufacturing overhead 10 Total manufacturing cost per unit $27 The per-unit manufacturing overhead cost is based on a $4 variable cost per unit and $120,000 fixed costs. The nonmanufacturing costs, all variable, are $8 per unit, and the sales price is $45 per unit. Sports...
The Goal OneGoal One Company manufactures windows. Its manufacturing plant has the capacity to produce 11,000...
The Goal OneGoal One Company manufactures windows. Its
manufacturing plant has the capacity to produce 11,000 windows each
month. Current production and sales are 10,000 windows per month.
The company normally charges $250 per window.
Cost information Variable costs that vary with number of units produced Direct materials 400,000 Direct manufacturing labour 350,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 50 batches x $800 per batch 40,000 Fixed manufacturing costs...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following Information is available for the factory. $ 27.80 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 3.90 $113,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. 25.09 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 4.00 $101,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. $ 28.00 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 3.90 $112,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers...
The only thing I need to know is C-1 and
C-2. Thank you!
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate Variable cost per crate: Direct materials $ 24.00 5.50 Direct labor 10.50 Variable overhead 3.60 $120,000.00 Fixed costs per month Boys and Girls of Canada is a...
Help Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory $ 40 Sales price per case Variable cost per case: Direct materials Direct labor Variable overhead & sales commissions Fixed costs per month 12 3 10 $ 60,000 Wildwood Camps is a youth organization that serves hot chocolate at its camping facilities throughout Montana....
1021-1, LO21-2, LO21-3, Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory. 021-4 EXERCISE 21.5 Soal Order Decisions and Ipportunity Costs $40 Sales price per case Variable cost per crate: Direct materials Direct labor Variable overhead & sales commissions Fixed costs per month 12 3 10 $60,000 Wildwood Camps is a youth organization that...
Special Order; Opportunity Cost Alton Inc. is working at full production capacity producing 20,000 units of a unique 11-23 product. Manufacturing costs per unit for the product are as follows: $9 Direct materials Direct labor Manufacturing overhead 10 Total manufacturing cost per unit $27 The per-unit manufacturing overhead cost is based on a $4 variable cost per unit and $120,000 fixed costs. The nonmanufacturing costs, all variable, are $8 per unit, and the sales price is $45 per unit. Sports...
The Goal OneGoal One Company manufactures windows. Its
manufacturing plant has the capacity to produce 11,000 windows each
month. Current production and sales are 10,000 windows per month.
The company normally charges $250 per window.
Cost information Variable costs that vary with number of units produced Direct materials 400,000 Direct manufacturing labour 350,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 50 batches x $800 per batch 40,000 Fixed manufacturing costs...
Most questions answered within 3 hours.
-
How would you train your employees to avoid risks of using
mobile devices?
asked 4 minutes ago -
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 1 hour ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 1 hour ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 2 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 3 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 3 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 5 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 6 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 6 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 6 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 6 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 6 hours ago