Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce Gwinnett has the capacity to manufacture and sell 11,000 cases of sauce each year but is currently only manufacturing and selling 9,900 The following costs relate to annual operations at 9,900 cases Total Cost Variable manufacturing cost $99,000 Fixed manufacturing cost $47,000 Variable selling and administrative cost $39,600 Fixed selling and administrative cost $29,000 Gwinnett normally sells its sauce for $25 per case A local school district is interested in purchasing Gwinnett's excess capacity of 1,100 cases of sauce but only if they can get the sauce for $13 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

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 30, 2024

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 11,000 cases of sauce each year but is

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 11,000 cases of sauce each year but is currently only manufacturing and selling 9,900. The following costs relate to annual operations at 9,900 cases:

	Total Cost
Variable manufacturing cost	$99,000
Fixed manufacturing cost	$47,000
Variable selling and administrative cost	$39,600
Fixed selling and administrative cost	$29,000

Gwinnett normally sells its sauce for $25 per case. A local school district is interested in purchasing Gwinnett's excess capacity of 1,100 cases of sauce but only if they can get the sauce for $13 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: