Question
Dorina Company makes cases of canned dog food in batches of 1,000 cases and sells each case for $15. The plant capacity is 50,000 cases;
Dorina Company makes cases of canned dog food in batches of 1,000 cases and sells each case for $15. The plant capacity is 50,000 cases; the company currently makes 40,000 cases. Doggie-Mart has offered to buy 1,500 cases for $12 per case. Because product-level and facility-level costs are unaffected by a special order, they are omitted.
Required
Complete the spreadsheet to calculate the contribution to income if the special order is accepted. Construct formulas so that the number of cases or the price could be changed and the new contribution would be automatically calculated.
Spreadsheet Tips
- The numbers in cells B18 to B20 should be formulas that refer to B15. This allows the number of cases to be changed in cell B15 with the other cells changing automatically.
- The formula in cell B21 uses a function named ROUNDUP to calculate the even number of batches. The formula should be =ROUNDUP(B15/1000,0) where the zero refers to rounding up to the nearest whole number.
- (Ungraded) Explore the power of formulas by copying cells A14 to G23 into the scratchpad area below. Try different order sizes (such as 2,000) or different prices to see the effect on contribution to profit.
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