Question
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
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 42,600 pies annually. The plant has only two customers, Panama Food Mart and East Street Coffee. Annual orders for Panama total 21,300 pies, and annual orders for East Street total 10,650 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 $4.75 per pie, and annual fixed manufacturing costs are $138,450.
The pie business in this town has two seasons, summer and winter. Each season lasts exactly six months. Panama Food Mart orders 10,650 pies in the summer and 10,650 pies in the winter. East Street Coffee is closed in the winter and orders all 10,650 pies in the summer.
Required:
Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred.
Calculate the product cost for each season with excess capacity costs assigned to the season requiring it
A.
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
winter | per pie | |
summer | per pie |
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 |
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