Question
gwinnett barbecue sauce corporation manufacturers a specialty barbecue sauce. gwinett has the capacity to manufacture and sell 21,000 cases of sauce each year but is
gwinnett barbecue sauce corporation manufacturers a specialty barbecue sauce. gwinett has the capacity to manufacture and sell 21,000 cases of sauce each year but is currently only manufacturing and selling 19,500. the following costs relate to annual operations at 19,500 cases:
variable manufacturing costs -$331500 fixed manufacturing cost -$ 65000 variable selling and administrative cost $78000 fixed selling and administrative cost $47000 gwinnett normally sells its sauce for $40 per case. A local school district is interested in purchasing gwinnett's excess capacity of 1500 cases of sauce but only if they can get the sauce $20 per case. this special order would not affect regular sales or total fixed costs or variable costs per unit. if this special order is accepted, gwinnett's profits for the year will:
increase by $750 decrease by $1,500 decrease by $19,500 decrease by $13,500
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