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PLease ASAP! show calculations! Honor Inc. is a very small-scale producer of holiday season tea lights located in central Texas, operating primarily around the Holiday
PLease ASAP! show calculations!
Honor Inc. is a very small-scale producer of holiday season tea lights located in central Texas, operating primarily around the Holiday season. Honor's entire annual production takes place over a single weekend in early December, during which a maximum of 3,000 tea lights of varied scents can be produced and packaged into boxes of thirty tea lights each. For purposes of this problem, assume that all tea lights have identical costs. Currently, Honor makes 2,400 tea lights during the weekend. Variable costs consist of materials (32 pounds of material @ \$5/pound) and boxes (@ \$0.50/box). All other costs, including facilities, overhead, and labor, are considered fixed costs of $250. Honor can sell each box for $4. Ignore taxes throughout the problem. Over the past several years, Honor has received numerous customer requests for specialty boxes containing just one type of tea lights (her winter lodge scented tea lights are very popular). Honor is therefore considering offering specialized boxes as a new product line. While the tea lights themselves would be the same as before, they would be packaged in a smaller box, costing $0.20 each. The smaller box would hold six tea lights, and Honor can sell it for $2 per box. Adding the new product line would not affect existing costs, including the fixed costs. A) Assume that the business is only producing regular boxes. What is the breakeven point in the number of regular boxes? Input number rounded off to two decimal points. B) Assume that the business completely shifted to producing only specialty boxes and produced as many as possible, what is the profit? Input number without the dollar sign. C) Assume that total production is at the maximum capacity and that the business can sell whatever is made. If the business were to produce a mixture of regular and specialty boxes, what is the smallest number of specialty boxes that would need to be produced to break even? Input number rounded off to two decimal pointsStep by Step Solution
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