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Setting sales prices The Sweet Treats Company manufactures candy that is sold to food distributors. The company produces at full capacity for six months each
Setting sales prices The Sweet Treats Company manufactures candy that is sold to food distributors. The company produces at full capacity for six months each year to meet demand during the "candy season from Halloween through Valentine's Day During the other six months of the year, the manufacturing facility operates at 75% of capacity. The Sweet Treats Company provides the following data for the year: The Sweet Treats Company receives an offer to produce 13,000 cases of candy for a special event. This is a one- time opportunity during a period when the Company has excess capacity. What is the minimum sales price. The Sweet Treats Company should accept for the order? Explain why. Cases of candy produced and sold Sales price Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs 1,800,000 cases $ 37.00 per case 20.00 per case 6,400,000 per year 2.00 per case 3,500,000 per year
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