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Please solve the answers and send fast. Please do on excel showing steps. TREKK COMPANY Trekk company produces specialty water bottles and sells them to
Please solve the answers and send fast. Please do on excel showing steps. TREKK COMPANY Trekk company produces specialty water bottles and sells them to retailers who sell them directly to consumers. The water bottles are high quality bottles produced for outdoor activities such as camping. In December Jackson Triggs, the president of the company, was considering an alternative marketing plan for that was presented to her by Stephanie Terril, the marketing manager. Based on sales from January through December Jackson expected that sales would amount to units. The alternative marketing plan is presented below: Marketing Plan: At the present time, we sell the product to retailers for $ per bottle. Retailers generally charge the consumers between $ and $ If we cut our selling price to retailers to $ I expect that the product will do much better. Their increased markup will give them the incentive to display our product more prominently and to promote it more vigorously to customers. We should support this strategy by supplying more promotional materials to retailers, which I expect would be an increase of $ in Advertising and Promotion costs. Based on the price cut and the increase in advertising and promotion, I expect that we will be able to boost our sales volume by percent to units in Jackson received cost data from the companys CFO, Ken Choi. Ken expects that the cost data below are also reliable estimates for for a production volume up to units. Beyond units, the company would have to rent additional machines with a capacity of units each which would increase fixed manufacturing overhead costs by $ per machine. Cost Data Manufacturing Costs for water bottles based on production volume of units: Direct Materials: $ per unit Direct Labor: $ per hour each worker can make units in hour Packaging: $ per unit Variable Manufacturing Overhead: $ per unit Fixed Manufacturing Overhead: $ Selling and Administrative Costs for bottles based on sales volume of units: Sales Commissions: $ per unit Shipping Costs: $ per unit Advertising and Promotion fixed: $ Fixed Selling and Admin Expenses: $ Trekk Company has been approached by the government, which is seeking to buy bottles for its volunteer camping centers in The proposed government contract states that the government would pay Trekk Company a price of $ per bottle. If Trekk decides to accept this special order, they would avoid packaging costs for this contract as well as all variable selling and administrative costs. The companys capacity is limited to only units. If they accept the government contract, they will need to increase their capacity by renting an additional machine. Refer to page for the companys estimated cost data and additional machine rental cost. Assume that Trekk does not adopt the proposed Marketing Plan and that the companys production and sales level without the government contract is expected to be bottles for
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