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Annie's Homemade has been invited to submit a bid to cater a Memorial Day picnic with $60$ servings of four

flavors for a total of $240$ pre$-$packaged servings of ice cream. Annie's' average ingredient and packaging

costs $($including cup, lid, spoon, and stickers$)$ are $$1\mathrm{.}50$ per serving. It would cater the event with one

manager, whose is paid an annual salary of $$40,000($or an average of $$20\mathrm{.}00$ per hour$),$ and two additional

employees who are paid $$8\mathrm{.}00$ per hour. The wedding party expects Annie's staff to remain on$-$site for two

hours to serve ice cream. The round$-$trip drive time to the event plus the tent setup and breakdown time is

$1\mathrm{.}50$ hours. The wedding is $40$ miles round$-$trip and the company pickup truck's diesel fuel, diesel exhaust

fluid, and oil expenses are $$0\mathrm{.}75$ per mile.

The manager catering the wedding would also spend $3\mathrm{.}5$ hours manufacturing the ice cream for the picnic

and portioning it into six$-$ounce paper cups. He would be assisted by one employee for two hours who

would apply a branded flavor sticker and an ingredient label before securing one lid on each cup of ice

cream. The company can fulfill the order with its existing capacity and has gathered the following

information with respect to its annual fixed overhead:

In$-$store Manufacturing overhead $($e$.$g$.,$

equipment depreciation, rent, utilities,

insurance, etc.$).....$

Number of servings produced per year

$($including mobile servings$).....$

Pickup truck depreciation, insurance,

registration, and vehicle tax.....

$$48,000$

Mobile sales equipment depreciation $($e$.$g$.,$

trailer, mobile freezer and serving tent$)$ $$3,000$

Number of mobile servings sold per

year.....

The total bid price splits into two pieces$-$gross revenue and state and local sales tax $(7\%).$ Then, $5\%$ of the

gross revenue will be paid to Annie's Homemade's corporate headquarters as a royalty fee. Since the picnic

sponsor plans to pay with a credit card, $3\%$ of the total bid price will be paid to the credit card company for

processing the payment.

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