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Requirement 2. The Chesapeake Corporation has offered to produce 2,500 units of Everlast for Buffalo so that Buffalo may accept the Apex offer. That is,
Requirement 2. The Chesapeake Corporation has offered to produce 2,500 units of Everlast for Buffalo so that Buffalo may accept the Apex offer. That is, if Buffalo accepts the Chesapeake offer, Buffalo would manufacture 7,500 units of Everlast and 2,500 units of Stronglast and purchase 2,500 units of Everlast from Chesapeake. Chesapeake would charge Buffalo $45 per unit to manufacture Everlast. On the basis of financial considerations alone, should Buffalo accept the Apex offer? Show your calculations. Buffalo is considering manufacturing 7,500 units of Everlast and 2,500 units of Stronglast and purchasing 2,500 units of Everlast from Chesapeake. Chesapeake would charge Buffalo S45 per unit to manufacture Everlast. Begin by completing the following table for manufactured Stronglast units and purchased Everlast units. Manufacture Purchase Everlast Stronglast Total selling 2,500 units On the basis of financial considerations alone, Buffalo should the Chesapeake offer. Requirement 3. Suppose Buffalo had been working at less than full capacity, producing 7,500 units of Everlast, at the time the Apex offer was made. Calculate the minimum price Buffalo should accept for Stronglast under these conditions. (Ignore the previous $47 selling price.) The minimum selling price would be Requirement 2. The Chesapeake Corporation has offered to produce 2,500 units of Everlast for Buffalo so that Buffalo may accept the Apex offer. That is, if Buffalo accepts the Chesapeake offer, Buffalo would manufacture 7,500 units of Everlast and 2,500 units of Stronglast and purchase 2,500 units of Everlast from Chesapeake. Chesapeake would charge Buffalo $45 per unit to manufacture Everlast. On the basis of financial considerations alone, should Buffalo accept the Apex offer? Show your calculations. Buffalo is considering manufacturing 7,500 units of Everlast and 2,500 units of Stronglast and purchasing 2,500 units of Everlast from Chesapeake. Chesapeake would charge Buffalo S45 per unit to manufacture Everlast. Begin by completing the following table for manufactured Stronglast units and purchased Everlast units. Manufacture Purchase Everlast Stronglast Total selling 2,500 units On the basis of financial considerations alone, Buffalo should the Chesapeake offer. Requirement 3. Suppose Buffalo had been working at less than full capacity, producing 7,500 units of Everlast, at the time the Apex offer was made. Calculate the minimum price Buffalo should accept for Stronglast under these conditions. (Ignore the previous $47 selling price.) The minimum selling price would be
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