Best Cupcakes Inc. produces a variety of high$-$quality cupcakes. The company just received a special order to produce $300$ cupcakes with a

modified flavour and frosting. Each regular cupcake costs $$4$ to produce $$3$ in total for variable costs and $$1$ for allocated fixed costs that are

common to the company$).$ A regular cupcake is priced at $$7.$ Extra costs for the modified cupcakes would be as follows:

Extra colouring and flavour required for the modified cupcakes cost $$0\mathrm{.}40$ per cupcake.

A new shape of baking mould will need to be purchased for $$200($a one$-$time cost$).$

The price charged for a modified cupcake is $$8\mathrm{.}25$ each. Best Cupcakes is currently operating at full capacity, so the production and sale of a

regular cupcake must be given up for each modified cupcake produced and sold.

Should the company accept the order for the modified cupcakes?

Do not enter dollar signs or commas in the input boxes.

Round all answers to $2$ decimal places.

Foregone Contribution Margin per Cupcake $

Variable Cost per Cupcake $

Fixed Cost per Cupcake $

Total Relevant Costs $

Accept or Reject:

Open Plains Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $$52,000$ when it was

purchased nine years ago. It has a book value of $$6,000.$ According to the mechanic who serviced the truck during its last oil change, the old truck

has $3$ years of useful life left.

Open Plains Catering wants to purchase a brand$-$new truck. The new truck costs $$62,000$ and has a $10-$year useful life, after which it will have no

salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional $$9,000$ per year in contribution margin. It

would also have a refrigerated section that would reduce waste by $$900$ each year. As the truck will be new, repairs and maintenance costs will also

decrease from $$2,000$ to $$1,400$ annually. The old truck can be sold for $$5,000.$

Prepare a quantitative analysis to determine whether or not to purchase the new truck.

Do not enter dollar signs or commas in the input boxes.

Use the negative sign for values that must be subtracted.

Should they retain their old truck or replace it$?$