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The Pelican Company produces products for bars and nightclubs. Their main product lines are darts and billiards. The information below gives the performance of the
The Pelican Company produces products for bars and nightclubs. Their main product lines are darts and billiards. The information below gives the performance of the two segments over the prior fiscal year. The manager of the firm has hired you to answer some questions for him; these are given in the "Required" section. Darts Billiards Total Sales $1,500,000 $4,600,000 $6,100,000 Variable Costs $800,000 $3,800,000 $4,600,000 Fixed Costs: Avoidable Fixed Costs $200,000 $400,000 $600,000 Common Fixed Costs $100,000 $400,000 $500,000 The firm also has information relating to one if its products, billiard balls. They know that currently they produce their billiard balls in house. This costs them $60 in variable cost per set, $10 in allocated common fixed cost, and $30 in avoidable fixed costs. They are considering purchasing these balls from an outside supplier. This supplier would charge them $100 per set. However, the company would like to continue to have their logo on each set. Currently, this costs them an additional $10 per set to add the logo. They expect this would continue to be the cost to print the logos on the purchased balls as well (this charge is in addition to both the purchase and production prices)
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