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eBook Special Order, Traditional Analysis Fiorello Company manufactures two types of cold-pressed olive oil, Refined Oil and Top Quality Oil, out of a joint process.
eBook Special Order, Traditional Analysis Fiorello Company manufactures two types of cold-pressed olive oil, Refined Oil and Top Quality Oil, out of a joint process. The Joint (common) costs incurred are $85,000 for a standard production run that generates 38,800 gallons of Refined oil and 19,400 gallons of Top Quality Oll. Additional processing costs beyond the split off point are $2.25 per gallon for Refined Oil and $1.65 per gallon for Top Quality Oil Refined Oll sells for $4.05 per gallon, while Top Quality Oil sells for $8.15 per gallon. MangiareBuono, a supermarket chain, has asked Fiorello to supply it with 38,800 gallons of Top Quality Oil at a price of $7.95 per gallon. MangiareBuono plans to have the oil bottled in 16 ounce bottles with its own MangiareBuono label if Fiorello accepts the order, it will save $0.28 per gallon in packaging of Top Quality Oll. There is sufficient excess capasty for the order. However the market for Refined Oil is saturaped, and any additional sales of Refined Oll would take place at a price of $3.03 per gallon. Assume that no significant non-unit-level activity costs are incurred Required: 1. What is the profit normally earned on one production run of Refined on and Top Quality Ob? 2. Should Fiorello accept the special order? Check My Work 4 more Check My Worces remana Sumo Grad ar AO 5:14 PM 11212120
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