Question
Cobalt, Inc., manufactures vitamin supplements with an average manufacturing cost of $163 per case (a case contains 100 bottles of vitamins). Cobalt, Inc., sold 250,000
Cobalt, Inc., manufactures vitamin supplements with an average manufacturing cost of $163 per case (a case contains 100 bottles of vitamins). Cobalt, Inc., sold 250,000 cases last year to the following three classes of customer:Customer:Large drugstore chain: Price per case - $200; Cases sold - 125,000.Customer: Small local pharmacies: Price per case - $232; Cases sold - 100,000.Customer: Individual health clubs: Price per case - $250; Cases sold - 25,000. The large drugstore chain special labeling costs $0.03 per bottle. The chain orders through electronic data interchange (EDI) which costs Cobalt about $50,000 annually in operating expenses and depreciation. Cobalt pays shipping costs, which amounted to $1.5 million last year. The small local pharmacies order in smaller lots that require special picking and packing in the factory; the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Cobalt products to the pharmacies average 10 percent of sales. Bad debts expense amounts to 1 percent of sales.Individual health clubs purchase vitamins in even smaller lots; the special picking and packaging costs average $30 per case. There are no sales commissions for the health clubs. Instead, Cobalt advertises in health club management magazines, accepts orders by phone and supplies point-of-sale posters and displays for the clubs. these marketing costs are $100,000 per year. Bad debts expense for this class of customer average 10 percent.
1.How much is the profit per case Chain store class?
A.$21.60
B.$23.48
C.$28.00
D.$32.00
2. .How much is the profit per case for Health Clubs?
A.$21.60
B.$23.48
C.$28.00
D.32.00
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