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Tom's, Inc., produces various Mexican food products and sells them to Western Foods, a chain of grocery stores located in Texas and New Mexico. Tom's,
Tom's, Inc., produces various Mexican food products and sells them to Western Foods, a chain of grocery stores located in Texas and New Mexico. Tom's, Inc., makes two salsa products: Western Foods Salsa and Mexico City Salsa. Essentially, the two products have different blends of whole tomatoes, tomato sauce, and tomato paste. The Western Foods Salsa is a blend of whole tomatoes, tomato sauce, and tomato paste. The Mexico City Salsa, which has a thicker and chunkier consistency, consists of whole tomatoes, tomato sauce, and tomato paste. Each jar of salsa produced weighs ounces. For the current production period, Tom's, Inc., can purchase up to pounds of whole tomatoes, pounds of tomato sauce, and pounds of tomato paste; the price per pound for these ingredients is $ $ and $ respectively. The cost of the spices and the other ingredients is approximately $ per jar. Tom's, Inc., buys empty glass jars for $ each, and labeling and filling costs are estimated to be $ for each jar of salsa produced. Tom's contract with Western Foods results in sales revenue of $ for each jar of Western Foods Salsa and $ for each jar of Mexico City Salsa.
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