Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PROBLEM 5 (15 Points) Albyssa makes scented candles to be sold in flower shops. She sells them for S0.60 each. Her cash production costs are

image text in transcribed
PROBLEM 5 (15 Points) Albyssa makes scented candles to be sold in flower shops. She sells them for S0.60 each. Her cash production costs are as follows: Variable production costs Fixed Production costs S0.22 S0.07 In addition, Alyssa has agreed to pay her one salesperson, LaShaude, a 10% commission on all sales revenue. Her other nonproduction costs are all fixed and amount to S15,000 per year. A local grocery store owner, Apu, has asked Alyssa and her competitors to offer bids on providing 1,000 candles for the Christmas season. Since Alyssa's business is reasonably profitable and she wants to win the job, she wonders what price she should offer to provide the candles. The new job will not increase any of her fixed costs. REQUIRED: a. What is the lowest price Alyssa could bid and not lose money on this sale? b. If she wants to earn 5% profit on the job, what price should she bid? c. What other qualitative factors should she also consider

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fraud In Accounts Payable How To Prevent It

Authors: Mary S. Schaeffer

1st Edition

0470260459, 978-0470260456

More Books

Students also viewed these Accounting questions

Question

Does it exceed two pages in length?

Answered: 1 week ago

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago