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Assume that a Fasano's soup plant is running a 85% of its monthly capacity. Fasano's has just received a special order to produce 55,000 cases
Assume that a Fasano's soup plant is running a 85% of its monthly capacity. Fasano's has just received a special order to produce 55,000 cases o chicken noodle soup for a national supermarket. The supermarket will sell the soup under its own private brand label. The soup will be the same in all respects, except for the label, which will cost Fasano's an extra $6,000 in total to design. The supermarket has offered to pay only $28.00 per case, which is well under Fasano's normal sales price. Costs at the current production level (340,000 cases) are as follows: Is there enough excess capacity to fill this order? Will Fasano's operating income increase or decrease if it accepts this special order? By how much? Is there enough excess capacity to fill this order? If the plant is producing 340,000 cases a month, yet only operating at 85% of capacity, it must have a capacity level of cases per month. s means the plant has excess capacity of cases per month. there is enough capacity to fill this special order. Will Fasano's operating income increase or decrease if it accepts this special order? By how much? Complete the following incremental analysis to help you make your recommendation. (Use parentheses or a minus sign to indicate a
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