Question 4 For 30 years, Ron Porter has owned and operated Celtic Adventure Camp on the Bruce Peninsula, where year-round campers come to play sports, make friends, and develop leadership skills in an outdoor setting. The camp has built a loyal following with many campers returning year after year. An effort that Ron Porter believes has been critical in building loyalty is Celtic's practice of sending free T-shirts to camper's homes with the year and the name of the cabin in which the person stayed printed onto the shirt. Ron has been purchasing the T-shirts and doing the printing in-house since the camp began this effort 10 years ago. Earlier this year, he hired a consulting firm to help him find external companies that could do the purchasing and printing, and mailing the shirts to the campers. Production volume is expected to range from 9,000 to 11,000 shirts with a higher probability of production greater than 10,000 units. The consultant was paid $4,500 to complete the study and provide a report There are currently 3 one-month production runs and mailings of the shirts. The production runs occur after each camp session and are in September for the summer campers, in January for the fall campers, and in May for the winter campers. The shirts are mailed October 1, February 1, and June 1. The summer attracts the largest number of campers, with the fewest visiting in the winter. The ratio of production and mailing of the shirts for the summer, fall, and winter is expected to be 4:3:1, respectively. It is very important that the shirts be sent on time, given that emails for the following year's registration are sent two weeks after the mailing of the shirts, just before other camps in the area send out their registration materials. Ron believes that, having just received T-shirts in the mail, campers are far more likely to respond to the registration cmails with plans to return and prepayments. The close timing of the T-shirts and the registration emails, Ron believes, plays a large role in Celtic's high number of returning campers each year. The camp's printing facility has the capacity to produce 2,500 shirts per month with no overtime, and with its own people. Production beyond 2,500 units requires overtime hours at the overtime rate. The production staff members, who can cach complete 350 printed shirts in 40 hours, are paid $12.50 per hour for regular time and double time for any overtime. The time needed to organize camper data and design shirts limits production time to one month. This time limit and the critical need to have the T-shirts ready by the last day of the month very often results in a lot of overtime. The material costs for the shirts are $9.50 per shirt. Experience reveals that variable overhead is 12% of labour costs and fixed overhead has been $9,500 per year. In prior years, area businesses have asked Ron to produce a small number of shirts for their employees and customer promotions in the off-season. This activity is expected continue and has generated $5,000 of annual revenue The consultant report paid for by Celtic Adventure Camp recommended two suppliers, with both potential suppliers offering to also mail out the shirts. The first is Scott's Printing, which will provide any quantity up to 9,000 a year for $12.80 per shirt. As volume increases above 9,000, the per-unit cost will decrease. Specifically, for each 1,000-unit increment, the price per unit will drop by S0.50 per unit so that an order of 11,000 shirts will be priced at $11.80 cach. If Celtic chooses this option and outsources all of their production, they will eliminate all of the annual internal fixed costs related to this activity. The report also stated that Scott's Printing is noted for its quality (superior to Celtic's historical in-house results) and a dependable on-time delivery record. The report also said, however, that management of the firm is inflexible and difficult to work with at times. The other firm recommended in the consulunt report is Peninsula Printing. Peninsula's pricing is structured a little differently. This firm sets a fixed price per year of $37,000, plus $10.00 per shirt, up to a volume of 9,000. Beyond the 9,000-unit volume, the price would decline by S0.75 for each additional 1,000 units produced. Therefore, at a volume of 10,000 units, Celtic would be charged $8.50 per unit plus $37,0000. This option also results in an elimination of the annual fixed costs if all production is outsourced Peninsula Printing is new to the area but in markets where it currently operates it is well regarded. Required: Following the six-step decision model for short-run decision, recommend whether Celtic Adventure Camp should outsource the T-shirt printing and mailing process. If so, which outsourcing contract should be accepted? Show calculations to support your recommendation, (15 marks) Question + For 30 years, Ron Porter has owned and operated Celtic Adventure Camp in the Bruce Peninsula, where year-round campers come to play sports, make friends, and develop leadership skills in an outdoor setting. The camp has built a loyal following with many campers returning year after year. An effort that Ron Porter believes has been critical in building loyalty is Celtic's practice of sending free T-shirts to camper's homes with the year and the ringe of the cabin in which the person stayed printed onto the shirt Ron has been purchasing the T-shirts and doing the printing in-house since the camp hewan this elfort 10 years ago. Eartier this year, the hired a cunsulting firm to help him lind external companies that could do the purchasing and printing, and mailing the shirts to the camper Irelucten volume is expected to range from 9,000 to 11,000 shirts with a higher probability af prxcction greater than 10,000 units. The consultant was paid $4.500 to complete the study and provide a report intema fixed costs related to this activity. The report also stated that Scott's Printing is noted for its quality superior to Celtic's historical in-house results and dependable on-time delivery record. The report also said, however, that management of the film is inflexible and difficult to work with at times The other firm recommended in the consultand report is Peninsula Priming, Peninsula's pricing is structured a little differently. This firm sets a fixed price per year of 07.000, plus S10.00 per shirt, up to s volume of 9,000. Beyond the 9000-unit volume, the price wald decline by $0.75 for each additional 1.000 units produced. Therefore, nt a volume of 16.000 units, Celtic would be charged $850 per unit plus $37.0000. This option also revolts in an elimination of the aiul fixed costs if all production is outsource Peninsula Printing is new to the area but in other markets where it currently operates it is well regarded Required: Following the six-step decision model for short-un decision, recunmend whether Celtic Adventure Camp should outsource the T-shirt printing and mailing process. If so, which outsourcing contract should be accepted? Shu calculations to support your recommendation. (15 murks) There are currency 3 one-manth goduction runs and mailings cil' the shirts. The production runs occur afler vuel camp sessica and are in September for the summer campers, in January for the fall campers, and in May for the winter campers. The shirts are mailed October 1, February 1, and Jane 1. The summer attracts the largest number of carriers, with the fewest visiting in the winter. The ratio of production and mailing of the shirts for the surriner, fall, and winter is expected to be 4:3.1. respectively. It is very important that the shirts be scar on time, given that emails for the following year's registration are sent two weeks fer the mailing wf the shirts, just before other carnps in the area setid out their registration materials. Ron believes that having just received T-shirts in the chail, campers are far more likely to respond in the registration emails with plans to return and prepayments. The close timing of the T-shirts and the registration entails, Ron believes, plays a large role in Celtic's high her of returning campers each year. The camp's printing facility has the capacity to produce 2,500 shiris per month with no overtime, and with its own people. Production beyond 2,500 units requires overtime hours at the overtime rate. The production staff members, who can cach complete 350 printed shirts in 40 bours, are paid S12.50 per hour for regular time and double time for any overtime. The time needed to organize camper data and design shirts limits production time to one month. This time limit and the critical need to have the T-shirts ready by the last day of the month very often results in a lot of overtime. The material costs for the shirts are $9.50 per shirt. Experience reveals that variable averticadis 17% of labour costs and fixed overhead has been $9,500 per year. In peior yours, arca businesses have asked on to produce a small number of shirts for their employees and customer promotions in the off-season. This activity is expected to continue and has generated $5,000 of arintal revenue The consultant report paid for by Celtic Adventure Camp recommended two suppliers, with both potential suppliers offering to also mail out the shirts. The first is Scott's Printing, which will provide any quantity up to 9.000 a year for 512.80 per shirt. As volume increases above 9,000. the per-unit cost will decrease. Specifically, for each 3,000-unit increment, the price per unit will drop by S0.50 par unit so that an order of 11,000 shirts will be priced at $11.80 each. If Celtic chooses this option and outsources all of their production, they will eliminate all of the annual Question 4 For 30 years, Ron Porter has owned and operated Celtic Adventure Camp on the Bruce Peninsula, where year-round campers come to play sports, make friends, and develop leadership skills in an outdoor setting. The camp has built a loyal following with many campers returning year after year. An effort that Ron Porter believes has been critical in building loyalty is Celtic's practice of sending free T-shirts to camper's homes with the year and the name of the cabin in which the person stayed printed onto the shirt. Ron has been purchasing the T-shirts and doing the printing in-house since the camp began this effort 10 years ago. Earlier this year, he hired a consulting firm to help him find external companies that could do the purchasing and printing, and mailing the shirts to the campers. Production volume is expected to range from 9,000 to 11,000 shirts with a higher probability of production greater than 10,000 units. The consultant was paid $4,500 to complete the study and provide a report There are currently 3 one-month production runs and mailings of the shirts. The production runs occur after each camp session and are in September for the summer campers, in January for the fall campers, and in May for the winter campers. The shirts are mailed October 1, February 1, and June 1. The summer attracts the largest number of campers, with the fewest visiting in the winter. The ratio of production and mailing of the shirts for the summer, fall, and winter is expected to be 4:3:1, respectively. It is very important that the shirts be sent on time, given that emails for the following year's registration are sent two weeks after the mailing of the shirts, just before other camps in the area send out their registration materials. Ron believes that, having just received T-shirts in the mail, campers are far more likely to respond to the registration cmails with plans to return and prepayments. The close timing of the T-shirts and the registration emails, Ron believes, plays a large role in Celtic's high number of returning campers each year. The camp's printing facility has the capacity to produce 2,500 shirts per month with no overtime, and with its own people. Production beyond 2,500 units requires overtime hours at the overtime rate. The production staff members, who can cach complete 350 printed shirts in 40 hours, are paid $12.50 per hour for regular time and double time for any overtime. The time needed to organize camper data and design shirts limits production time to one month. This time limit and the critical need to have the T-shirts ready by the last day of the month very often results in a lot of overtime. The material costs for the shirts are $9.50 per shirt. Experience reveals that variable overhead is 12% of labour costs and fixed overhead has been $9,500 per year. In prior years, area businesses have asked Ron to produce a small number of shirts for their employees and customer promotions in the off-season. This activity is expected continue and has generated $5,000 of annual revenue The consultant report paid for by Celtic Adventure Camp recommended two suppliers, with both potential suppliers offering to also mail out the shirts. The first is Scott's Printing, which will provide any quantity up to 9,000 a year for $12.80 per shirt. As volume increases above 9,000, the per-unit cost will decrease. Specifically, for each 1,000-unit increment, the price per unit will drop by S0.50 per unit so that an order of 11,000 shirts will be priced at $11.80 cach. If Celtic chooses this option and outsources all of their production, they will eliminate all of the annual internal fixed costs related to this activity. The report also stated that Scott's Printing is noted for its quality (superior to Celtic's historical in-house results) and a dependable on-time delivery record. The report also said, however, that management of the firm is inflexible and difficult to work with at times. The other firm recommended in the consulunt report is Peninsula Printing. Peninsula's pricing is structured a little differently. This firm sets a fixed price per year of $37,000, plus $10.00 per shirt, up to a volume of 9,000. Beyond the 9,000-unit volume, the price would decline by S0.75 for each additional 1,000 units produced. Therefore, at a volume of 10,000 units, Celtic would be charged $8.50 per unit plus $37,0000. This option also results in an elimination of the annual fixed costs if all production is outsourced Peninsula Printing is new to the area but in markets where it currently operates it is well regarded. Required: Following the six-step decision model for short-run decision, recommend whether Celtic Adventure Camp should outsource the T-shirt printing and mailing process. If so, which outsourcing contract should be accepted? Show calculations to support your recommendation, (15 marks) Question + For 30 years, Ron Porter has owned and operated Celtic Adventure Camp in the Bruce Peninsula, where year-round campers come to play sports, make friends, and develop leadership skills in an outdoor setting. The camp has built a loyal following with many campers returning year after year. An effort that Ron Porter believes has been critical in building loyalty is Celtic's practice of sending free T-shirts to camper's homes with the year and the ringe of the cabin in which the person stayed printed onto the shirt Ron has been purchasing the T-shirts and doing the printing in-house since the camp hewan this elfort 10 years ago. Eartier this year, the hired a cunsulting firm to help him lind external companies that could do the purchasing and printing, and mailing the shirts to the camper Irelucten volume is expected to range from 9,000 to 11,000 shirts with a higher probability af prxcction greater than 10,000 units. The consultant was paid $4.500 to complete the study and provide a report intema fixed costs related to this activity. The report also stated that Scott's Printing is noted for its quality superior to Celtic's historical in-house results and dependable on-time delivery record. The report also said, however, that management of the film is inflexible and difficult to work with at times The other firm recommended in the consultand report is Peninsula Priming, Peninsula's pricing is structured a little differently. This firm sets a fixed price per year of 07.000, plus S10.00 per shirt, up to s volume of 9,000. Beyond the 9000-unit volume, the price wald decline by $0.75 for each additional 1.000 units produced. Therefore, nt a volume of 16.000 units, Celtic would be charged $850 per unit plus $37.0000. This option also revolts in an elimination of the aiul fixed costs if all production is outsource Peninsula Printing is new to the area but in other markets where it currently operates it is well regarded Required: Following the six-step decision model for short-un decision, recunmend whether Celtic Adventure Camp should outsource the T-shirt printing and mailing process. If so, which outsourcing contract should be accepted? Shu calculations to support your recommendation. (15 murks) There are currency 3 one-manth goduction runs and mailings cil' the shirts. The production runs occur afler vuel camp sessica and are in September for the summer campers, in January for the fall campers, and in May for the winter campers. The shirts are mailed October 1, February 1, and Jane 1. The summer attracts the largest number of carriers, with the fewest visiting in the winter. The ratio of production and mailing of the shirts for the surriner, fall, and winter is expected to be 4:3.1. respectively. It is very important that the shirts be scar on time, given that emails for the following year's registration are sent two weeks fer the mailing wf the shirts, just before other carnps in the area setid out their registration materials. Ron believes that having just received T-shirts in the chail, campers are far more likely to respond in the registration emails with plans to return and prepayments. The close timing of the T-shirts and the registration entails, Ron believes, plays a large role in Celtic's high her of returning campers each year. The camp's printing facility has the capacity to produce 2,500 shiris per month with no overtime, and with its own people. Production beyond 2,500 units requires overtime hours at the overtime rate. The production staff members, who can cach complete 350 printed shirts in 40 bours, are paid S12.50 per hour for regular time and double time for any overtime. The time needed to organize camper data and design shirts limits production time to one month. This time limit and the critical need to have the T-shirts ready by the last day of the month very often results in a lot of overtime. The material costs for the shirts are $9.50 per shirt. Experience reveals that variable averticadis 17% of labour costs and fixed overhead has been $9,500 per year. In peior yours, arca businesses have asked on to produce a small number of shirts for their employees and customer promotions in the off-season. This activity is expected to continue and has generated $5,000 of arintal revenue The consultant report paid for by Celtic Adventure Camp recommended two suppliers, with both potential suppliers offering to also mail out the shirts. The first is Scott's Printing, which will provide any quantity up to 9.000 a year for 512.80 per shirt. As volume increases above 9,000. the per-unit cost will decrease. Specifically, for each 3,000-unit increment, the price per unit will drop by S0.50 par unit so that an order of 11,000 shirts will be priced at $11.80 each. If Celtic chooses this option and outsources all of their production, they will eliminate all of the annual