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Data table More info Kimberly Corporation indicates that it wants Central to do an additional $114,000 worth of printing jobs during February. These jobs are
Data table More info Kimberly Corporation indicates that it wants Central to do an additional $114,000 worth of printing jobs during February. These jobs are identical to the existing business Central did for Kimberly in January in terms of variable costs and machine-hours required. Central anticipates that the business from Steven Corporation in February will be the same as that in January. Central can choose to accept as much of the Steven and Kimberly business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January. Central Printers operates a printing press with a monthly capacity of 2,400 machine-hours. Central has two main customers: Steven Corporation and Kimberly Corporation. Data on each customer for January are: (Click to view the data.) (Click the icon to view the special order information.) Read the requirements. Begin by calculating the amount that should be used to determine the allocation. Kimberly Corporation Since the of Kimberly is than the of Steven, to maximize operating income Central should first allocate the capacity needed to take all of the Corporation business and then allocate the remaining to Corporation. Now calculate the operating income using the allocation you determined above. What other factors should Central consider before making a decision? (Select all that apply.) A. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. B. Central's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. C. Will turning down the business of one company affect customer satisfaction? D. If Central sees long-run benefit in working with the company that provides the least profit, then Central must also look for ways to increase the profitability of the business it does with that company. E. If Central turns down one of the company's business, will that company continue to place orders with Central or seek alternative suppliers? F. If Central sees long-run benefit in working with the company that provides the greatest profit, then Central does not need to be concerned about turning down the business of the other company. G. Will both corporations continue to demand the same level of business going forward
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