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Acme Pie Company Ltd. is a new pie manufacturer who has an unbelievably awesome pie recipe. They have provided you with the following estimates for

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Acme Pie Company Ltd. is a new pie manufacturer who has an unbelievably awesome pie recipe. They have provided you with the following estimates for the month of March 2010. Direct labour $2.10/pie Direct materials $ 1.25/pie Total manufacturing overhead (based on 3,000 pies) $6,750/month Total manufacturing overhead (based on 4,500 pies) $7,725/month Packaging $0.25/pie Advertising $4,500/month Administration $ 1,600/month Acme has been approached by Calhoms, a new trendy coffee bar in town, to buy all of its pies. If the offer was accepted, Acme could eliminate its advertising costs and reduce its packaging costs by 60%. REQUIRED: If Acme does NOT accept Calhorns offer, it will sell its pies to the public at $7.95/pie. How many pies must Acme sell to the public to breakeven? Public Offer Acme Pie Company Ltd. is a new pie manufacturer who has an unbelievably awesome pie recipe. They have provided you with the following estimates for the month of March 2010. Direct labour $2.10/pie Direct materials $ 1.25/pie Total manufacturing overhead (based on 3,000 pies) $6,750/month Total manufacturing overhead (based on 4,500 pies) $7,725/month Packaging $0.25/pie Advertising $4,500/month Administration $ 1,600/month Acme has been approached by Calhoms, a new trendy coffee bar in town, to buy all of its pies. If the offer was accepted, Acme could eliminate its advertising costs and reduce its packaging costs by 60%. REQUIRED: If Acme does NOT accept Calhorns offer, it will sell its pies to the public at $7.95/pie. How many pies must Acme sell to the public to breakeven? Public Offer

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