Need data set and calculations to fill in excel sheet
Issue #4: Multi channel marketing of packaged food items The consulting group wanted to develop calculations using the relevant costing model of 'Special Orders'. They felt that in order to maximize production capacity 'special orders' should be accepted. These orders would represent one-time sales MGMT 8500 23W capstone -V39 opportunities of the products in a very high volume. Due to the high volume, client would have to be offered a price which is lower than the list price. Relevant data is presented in Appendix 4. Required: At Appendix Four (Multi channel marketing) the end of the two-week period, the consulting group would be meeting with the business partners. Objective: To maximize output from packaging machines, the volume of packaged foods has too high, In Prepare a report showing all the calculations and your recommendations for all the four issues. order to sell them, all possible channels will be explored. This includes accepting high volume, one time orders (or 'special orders). Due to the high volume, the selling price will be lower than that of the Need answer for appendix 4 with all data set and calculations to fill in excel sheet. regular selling price. The goal is to evaluate at what price can the special orders be accepted. Scenario: The consulting group has developed the following cost structure for packaged foods. This is based on a production capacity of 30,000 units. The unit selling price is set at $50. The fixed manufacturing expense s constant in the range of 25,000 to 50,000 units. The maximum production capacity is 30,000 units. It cars Per Unit Total Direct materials 540,000 calculations Direct labour 270,000 Variable Manufacturing Overhead 60,000 Fixed manufacturing overhead 420,000 Variable Selling Expense 180,000 Fixed Selling Expense 240,000 Due to market conditions, FSL can sell 20,000 units through regular channels. They plan to offer a quote to a large manufacturing facility to sell 9,000 units of the packaged food item, at a lower price. This would be a one-time order and can be classified as a special order, Since this would be sold directly to the client, there would be no sales commission and variable selling expense would be reduced by 70%. However, FSL has to buy freezer boxes so that the frozen items can be transported to the manufacturing facility. The freezer boxes would cost $ 39,000 and would be used solely for this special order. After that they would be sold as scrap to yield $4,000. Methodology The group would calculate the offer price. The offer price will cover all variable expenses and include a 45% markup on variable expenses. They will also consider qualitative aspects before recommending acceptance ( or rejection) of this special order