Blossom Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the companys major product lines is custom-printed cake boxes that are sold to some of the countrys best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Blossom uses a thick premium coated paper for all of its cake boxes. Based on annual production of 1,000,000 boxes, Blossoms cost for producing a box is as follows:

Paper		$0.13
Ink		0.05
Direct labor		0.05
Variable overhead		0.07
Fixed overhead		0.10
Total cost per box		$0.40

Nancy Jackson, a recent graduate of the Culinary Institute of America, is opening a new bakery in her hometown. She recently contacted Brad Lail, Blossoms top salesperson, about purchasing cake boxes for her new store. Brad described Blossoms boxes, emphasizing the high-quality paper and the unique printing process the company uses. Andrea is looking for ways to lower her operating costs, so after hearing Brad describe Blossoms boxes, she told him that all she needed was a simple, unprinted box. Andrea also told Brad that she needs 9,000 boxes and is willing to pay $0.24 per box. (a) Based on Andreas offer of $0.24 per box for an unprinted box, should Blossom accept Andreas order? Blossom currently has excess production capacity and can easily accommodate Andreas order in the production schedule.

Blossom select an option should notshould accept the order.

(b) Since Andrea wants a simple box, Brad is exploring using a lighter-weight paper for her boxes. He has found a suitable paper that will cost $0.08 per box. If Blossom uses this lighter-weight paper for Andreas boxes, should the company accept Andreas order at a price of $0.24 per box? Blossom currently has excess production capacity and can easily accommodate Andreas order in the production schedule.

Blossom select an option shouldshould not accept the order.

(c) After visiting with Andrea, Brad received a fax from one of Londons top bakeries. The bakerys normal box supplier suffered some fire damage and is unable to ship the bakerys order of 9,000 boxes this month. The bakerys owner is asking if Blossom can fill a onetime rush order of 9,000 boxes printed with the bakerys logo. The bakery is willing to pay a 10% price premium to expedite the order. If Blossom accepts the order, it will incur $796 in export taxes and shipping. Calculate the Profit on special order.

Profit on special order

$enter the profit on special order in dollars

Should Blossom accept the London bakerys offer?

Blossom select an option should not/should accept the special order.