Question
Simpson Company sells sandwiches from a rented van. Simpson has no inventories. Simpson Company had the following costs for last year (sold 10,000 sandwiches) and
Simpson Company sells sandwiches from a rented van. Simpson has no inventories.
Simpson Company had the following costs for last year (sold 10,000 sandwiches) and this year (sold 20,000 sandwiches):
10,000 sandwiches | 20,000 sandwiches | |
Materials | $55,000 | $110,000 |
Salaries | $50,000 | $50,000 |
Totals | $105,000 | $160,000 |
A. What would be the total projected cost for 30,000 sandwiches?
B. Assume Simpson has the opportunity to bid on a special order for sandwiches for a party. Simpson wants to do the party for marketing purposes and is willing to sell the sandwiches for less than the normal $12.00 to get the job. What is the lowest selling price Simpson should be willing to consider? (At what price will the special order not reduce income for the business.)
Please show the work. Thanks!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started