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Pharoah Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company's major product lines is custom-printed cake
Pharoah Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company's major product lines is custom-printed cake boxes that are sold to some of the country's best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Pharoah uses a thick premium coated paper for all of its cake boxes. Based on annual production of 1,000,000 boxes, Pharoah's cost for producing a box is as follows: Paper Ink $0.16 0.03 0.04 Direct labor 0.09 Variable overhead Fixed overhead Total cost per box 0.10 $0.42 (C) After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered some fire damage and is unable to ship the bakery's order of 10,000 boxes this month. The bakery's owner is asking if Pharoah can fill a onetime rush order of 10,000 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expedite the order. If Pharoah accepts the order, it will incur $808 in export taxes and shipping. Calcuate the Profit on special order. 1592 Profit on special order $1 Should Pharoah accept the London bakery's offer? Pharoah should accept the special order. Click if you would like to Show Work for this question: Open Show Work
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