Help Poppycrock, Inc. manufactures large crates of microwaveable popcorn that ar

Question

Help 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 28. 00 5. 50 10. 50 3, 80 S110,000. 00 Direct labor Boys and Girls of Canada is a not-for-profit organizetion 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 offerand 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? ?Prev 10f 4 Next > CH ???????

Explanation / Answer

Explanation

a Incremental unit cost of creating a normal crate 19.8 Incremental unit cost of creating a special - order crate 20.3 b-1 Impact on operating profit 8500 b-2 Opportunity cost 8500 c-1 Impact on operating profit -32500 c-2 Opportunity cost 32500

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