Located in a small town in upstate New York, Terry's Bakery operates a facility that makes pies for retail sale. The facility has the
Located in a small town in upstate New York, Terry's Bakery operates a facility that makes pies for retail sale. The facility has the capacity to make 36,000 pies annually. The plant has only two customers, Panama Food Mart and East Street Coffee. Annual orders for Panama total 18,000 pies, and annual orders for East Street total 9,000 pies. Terry's makes the pies fresh every day and carries no Inventory. It also ensure that the customers only sell freshly made pies as well. Variable manufacturing costs are $4 20 per pie, and annual fixed manufacturing costs are $97,200. The pie business in this town has two seasons, summer and winter. Each season lasts exactly six months. Panama Food Mart orders 9,000 pies in the summer and 9,000 ples in the winter. East Street Coffee is closed in the winter and orders all 9,000 pies in the summer Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring it. Complete this question by entering your answers in the tabs below. Required A Required B Complete this question by entering your answers in the tabs below. Required A Required B Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. Note: Round your answers to 2 decimal places. Product Cost per pie Winter ces Summer per pie Required B > Complete this question by entering your answers in the tabs below. Required A Required B Calculate the product cost for each season with excess capacity costs assigned to the season requiring it. Note: Round your answers to 2 decimal places. Product Cost Winter per pie Summer per pie < Required A
Step by Step Solution
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Step: 1
To calculate the product cost per pie for each season well need to allocate the fixed manufacturing costs to the pies produced and consider how to all...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
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