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. Mercias single plant has the capacity to make 99,000 packages of chocolate annually. Currently, Mercia sells to only two customers: Verns Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Verns orders 54,000 packages and Mega Stores orders 24,000 packages annually. Variable manufacturing costs are $28 per package, and annual fixed manufacturing costs are $561,000.

The gourmet chocolate business has two seasons, holidays and non-holidays. The holiday season lasts exactly four months and the non-holiday season lasts eight months. Verns orders the same amount each month, so Verns orders 20,400 packages during the holidays and 44,400 packages in the non-holiday season. Mega Stores only carries Mercias chocolates during the holidays.

Required:

a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. (Round your intermediate calculations and final answers to 2 decimal places.)

	Product Cost
Non-holiday		per package
Holiday	$32.21	per package

b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring it.(Round your intermediate calculations and final answers to 2 decimal places.)

	Product Cost
Non-holiday		per package
Holiday		per package