Requirements 1. How would accepting the order affect Hampshire's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Hampshire's managers consider in deciding whether to accept the order? 2. Hampshire's marketing manager, Peter Rouse, argues against accepting the special order because the offer price of $78 is less than Hampshire's $88 cost to make the sunglasses. Rouse asks you, as one of Hampshire's staff accountants, to explain whether his analysis is correct What would you say? Print Done Data Table 36 13 12 Direct materials Direct labor Variable manufacturing overhead Variable selling expenses Fixed manufacturing overhead Total cost 25 $2,200,000 Total fixed manufacturing overhead / 88,000 Pairs of sunglasses Print Done Each morning, Mike Ivery stocks the drink case at Mike's Beach Hut in Myrtle Beach, South Carolina. The drink case has 125 linear feet of refrigerated drink space. Each linear foot can hold either six 12-ounce cans or three 20-ounce bottles. (Click the icon to view the information on the cold drinks.) Mike's Beach Hut can sell all the drinks stocked in the display case each morning. Read the requirements Requirement 1. What is Mike's Beach Hut's constraining factor? What should Mike stock to maximize profits? The constraining factor is What should Mike stock to maximize profits? Complete the product mix analysis to determine which product would maximize Mike's profits Yummy Time Yummy Time Value-Soda 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Sales price per unit Variable cost per unit Contribution margin per unit Units per linear foot of shelf space Contribution margin per linear foot of shelf space Decision: Stock Requirement 2. Suppose Mike's Beach Hut refuses to devote more than 85 linear feet to any individual product. Under this condition, how many linear feet of each drink should Mike's stock? How many units of each product will be available for sale each day? (Abbreviation used: CM contribution margin.) Mike's Beach Hut should stock its shelves as follows: First stock D - per linear foot- Next stock CM per linear foot- How many units of each product will be available for sale each day based on the product mixed determined in the preceding step? (For entries with a S0 balance, linear feet with the product that has the linear feet with the product that has the make sure to enter "0 in the appropriate cell.) Units for sale Yummy Time in 12 oz. cans: Yummy Time in 20 oz. bottles: Value-Soda in 20 oz. bottles: bottles bottles
