Question
Dazzle Ink makes and sells paints to home improvement stores. Dazzle Ink maximum production is 7 million cans of paint per year. Current annual
Dazzle Ink makes and sells paints to home improvement stores. Dazzle Ink maximum production is 7 million cans of paint per year. Current annual production is 5 million cans. Fixed manufacturing, selling, and administrative costs total $6 million per year. The variable cost of making and selling each can of paint is $4,00. Stockholders expect a 10% annual return on the company's $25 million of assets. Requirements 1. What is Dazzle Ink current total cost of making and selling 5 million cans of paint? (5 pts) 2. 3. What is the current cost per can of paint? (5 pts) Assume that Dazzle Ink is a price-taker and that the current wholesale market price is $7.00 per can of paint. What is the target total of cost in producing and selling 5 million cans of paint? (5 pts) 4. Given Dazzle Ink's current total costs, will the company reach stockholders' profit goals? (5 pts) (Total 20 points)
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