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The Delmar Beverage Co. produces a premium root beer that is sold throughout its chain of restaurants in the Midwest. The company is currently producing
The Delmar Beverage Co. produces a premium root beer that is sold throughout its chain of restaurants in the Midwest. The company is currently producing 2.003 gallons of root beer per day, which represents 90% of its manufacturing capacity. The root beer is available to restaurant customers by the mug in bottles or packaged in s packs to take home. The selling price of a gallon of root beer averages $13, and cost accounting records indicate the following manufacturing costs per gallon of root beer: s 156 1 67 2 11 2 03 Total absorption cost In addition to the manufacturing costs just described. Delmar Beverage incurs an average cost of $1.05 per gallon to distribute the root beer to its restaurants. SaveMore, Inc., a chain of grocery stores, is interested in selling the premium root beer in gallon jugs throughout its stores in the St. Louis area during holiday periods and has offered to purchase root beer from Delmar Beverage at a price of $10.00 per gallon. SaveMore believes it could sell 222 gallons per day. If Delmar Beverage agrees to sell root beer to SaveMore, it estimates the average distribution cost will be $1.52 per gallon. Required a. identify all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SaveMore? (Round your answers to 2 decimal places.) Per Gallon Total relevant costs per gall /2 e's daily operating income be attected by the acceptance or this offer? Round your answer to 2 decimal places.] Assume that Delmar Beverage is currenty producing 2,226 gallons of root beer daly c-1. Identity all the relevant costs that Delmar Beverage should consider in evaluating the special sales order from SavelMore? (Round your answers to 2 decimal places.) c-2. How would Delmar Beverage's daily operating incone be affected by the accestance of this offer? (Round your answer to 2 decimal places.) O Type here to search
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