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SL Stewart Industries makes tennis balls. It only can produce as many as 1,700,000 cans of tennis balls per year. Current production is 1,200,000 cans.

SL Stewart Industries makes tennis balls. It only can produce as many as 1,700,000 cans of tennis balls per year. Current production is 1,200,000 cans. Annual manufacturing selling and administrative fixed costs total $1,317,000. The variable cost of making and selling each can of tennis balls is $.70. Stockholders expect a 15% annual return on the company's $3,300,000 of assets. (please show whole equation)

1.What is SL Stewarts current full product cost of making and selling 1,200,000 cans of tennis balls? What are the current full unit product cost for each can of tennis balls? (please show full equation)

2. Assume SL Stewart is a price-taker, and the current market price is $1.78 per can of tennis balls (the price at which manufacturers sell to retailers). What is the target full product cost of producing and selling 1,200,000 cans of tennis balls? Given SL stewarts current costs, will the company reach the stockholders profit goals? First calculate the target full product cost of producing and selling 1,200,000 cans of tennis balls? (Please show full equation)

3.If SL Stewart cannot change its fixed costs, what is the target variable cost per can of tennis ball?

4. Suppose SL Stewart could spend an extra $60,000 on advertising to differentiate its product so that it could be a price-setter. Assuing the original volume and costs, plus the $60,000 of new advertising costs, what cost-plus price will SL stewart want to charge for a can of tennis balls?

5. Grasteit INc, has just asked SL Stewart to supply the company with 200,000 cans of tennis balls at a special order price of $1.10 per can. Grasteit wants SL Stewart to package the tennis balls under Grasteit Label ( SL Stewart will imprint Grasteit Logo on each tennis ball and can). SL Stewart will have to spend $40,000 to change the packaging machinery. Assuming the original volume and costs should SL Stewart accept this special order? ( Assume SL Stewart will incur variable selling costs as well as variable manufacturing costs related to this order.)

6. Should SL Stewart accept the special order & will it increase or decrease operating income?

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