BELOW ARE THE DROP DOWN MENUS FOR THE ABOVE QUESTION The Sweet and Salty Company

Question

BELOW ARE THE DROP DOWN MENUS FOR THE ABOVE QUESTION

The Sweet and Salty Company manufactures candy that is sold to food distributors. The company produces at full capacity for six months each year to meet peak demand during the candy season" from Halloween through Valentine's Day During the other six months of the year the manufacturing facility operates at 75% of capacity The Sweet and Salty Company provides the following data for the year click the icon to view the data.) The Sweet and Salty Company receives an offer to produce 8000 cases of candy for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum selling price The Sweet and Salty Company should accept for the order? Explain why i Data Table The minimum selling price that Sweet and Salty Company should accept for the special order is the In this situation, the are not relevant because they will be incurred whether the order is accepted or not. Cases of candy produced and sold Sales price Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs 1,200,000 cases is appropriate in this situation. 37.00 per case 9.00 per case 6,700,000 per year 3.00 per case 2.900,000 per year

Explanation / Answer

The Minimum selling price that sweet and Salty Company should accept for the Special Order is the Variable manufacturing Cost $9 per case. In this situation, the Fixed Manufacturing Cost are not relevant because they will be incurred whether the order is accepted or not. Variable costing is appropriate in this situation.

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