Question
2. Erosion costs. Heavenly Cookie Company reports the following annual sales and costs for its current product line:Click on this icon to download the data
2. Erosion costs. Heavenly Cookie Company reports the following annual sales and costs for its current product line:Click on this icon to download the data from this table
Chocolate Chip | Snicker- doodle | Peanut Butter | Lemon Drop | Cream- Filled | |
Volume | 254,000 | 204,000 | 145,000 | 85,000 | 95,000 |
Price | $0.60 | $0.46 | $0.52 | $0.49 | $0.51 |
Cost | $0.20 | $0.20 | $0.19 | $0.22 | $0.31 |
Heavenly is thinking of adding Mississippi Mud brownies to the product line. The ultra-rich brownies would sell for $0.91 a piece and cost $0.80to produce. The forecasted brownie volume is 223,000 per year. Introduction of brownies, however, will reduce cookie sales by 192,000 with the following drops in sales per cookie:110,000 in chocolate chip, 37,000 in snickerdoodle, 28,000 in peanut butter, 8,000 in lemon drop, and 9,000 incream-filled. What is the erosion cost of introducing the brownies? What is the net change in annual margin if Mississippi Mud brownies are added to the product line?
I answered the first part correctly
What is the erosion cost of introducing the brownies?
$6682066820
(Round to the nearest dollar.)
need help with this part
What is the net change in annual margin if Mississippi Mud brownies are added to the product line?
$
(Round to the nearest dollar.)
4. Working capital cash flow.Cool Water, Inc. sells bottled water. The firm keeps in inventory plastic bottles at 11% of the monthly projected sales. These plastic bottles cost $0.006 each. The monthly sales for the first four months of the coming year are as follows:
January:2,200,000 |
|
February:2,100,000 | |
March:3,000,000 | |
April:3,100,000 |
What is the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash?Note:Enter a decrease as a negative number.
What is the change in working capital for January?
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