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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 46,200 pies annually. The plant has only two customers, Panama Food Mart and East Street Coffee. Annual orders for Panama total 23,100 pies, and annual orders for East Street total 11,550 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 $5.05 per pie, and annual fixed manufacturing costs are $164,010.

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