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Mango Snacks produces 70,000 cases per year. Costs are as follows: variable production costs $23 per case, fixed production costs $11 per case, variable selling
Mango Snacks produces 70,000 cases per year. Costs are as follows: variable production costs $23 per case, fixed production costs $11 per case, variable selling costs $6 per case, and fixed selling and administrative costs $5 per case. The total cost per case is $45. Mango Snacks marks up prices 25% over full costs. With a capacity to produce an additional 20,000 cases, a Korean retailer has offered to buy 15,000 cases at $55 per case. Additional shipping and selling costs will be $4 per case. Prepare a cost-benefit analysis of this order.
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