Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia's single plant has the capacity to make 92,500 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern's Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern's orders 47,500 packages and Mega Stores orders 17,500 packages annually. Variable manufacturing costs are $15 per package, and annual fixed manufacturing costs are $590,000. Required: What cost per package should the cost system report? (Round your intermediate calculations and final answers to 2 decimal places.) Cost per package at capacity Cost per package at demand
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started