Alpaca Products imports Peruvian sweaters and sells them wholesale. Lidla is a large retailer with 50 different

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Alpaca Products imports Peruvian sweaters and sells them wholesale. Lidla is a large retailer with 50 different warehouse stores across Europe. Alpaca normally purchases sweaters for €5 each and ships them via boat to Amsterdam for €0.50 apiece. Alpaca normally sells the sweaters for €10 apiece, but Lidla is considering the purchase of 1,000 sweaters and wants the price reduced to €8 each. Lidla also wants the 1,000 sweaters delivered in a month. Alpaca will have to air freight the shipment for €1,000. Lidla also expects Alpaca to put Lidla labels on the sweaters and ship them directly to the warehouse stores. The labeling will require 20 hours of labor at €10/hour. The shipping to the warehouse stores will cost €0.40 per sweater.

What is the profit to Alpaca of having Lidla as a customer?

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Management Accounting In A Dynamic Environment

ISBN: 9780415839020

1st Edition

Authors: Cheryl S McWatters, Jerold L Zimmerman

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