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VJ Walker Industries makes tennis balls. Its only plant can produce as many as 2 , 8 0 0 , 0 0 0 cans of

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VJ Walker Industries makes tennis balls. Its only plant can produce as many as 2,800,000 cans of tennis balls per year. Current production is 2,300,000 cans. Annual manufacturing, selling, and administrative fixed costs total $2,314,000. The variable cost of making and selling each can of tennis balls is $0.50. Stockholders expect a 11% annual return on the company's $2,800,000 of assets.
Read the requirements.
Requirement 1. What is VJ Walker Industries' current full product cost of making and selling 2,300,000 cans of tennis balls? What is the current full unit product cost of each can of tennis balls?
(Round the per unit cost to the nearest cent.)
Plus:
Total full product costs
Divided by the
Full product cost per can
Requirement 2. Assume VJ Walker Industries is a price-taker, and the current mark product cost of producing and selling 2,300,000 cans of tennis balls? Given VJ Walk
First, calculate the target full product cost of producing and selling 2,300,000 cans o
Less:
Target full product cost
Given VJ Walker Industries' current costs, will the company reach the stockholders'
VJ Walker Industries' current total full product cost is than the target full pro
Requirement 3. If VJ Walker Industries cannot change its fixed costs, what is the ta
Less: q,
Target total variable costs
Divided by the
Requirements
What is VJ Walker Industries' current full product cost of making and selling 2,300,000 cans of tennis balls? What is the current full unit product cost of each can of tennis balls?
Assume VJ Walker Industries is a price-taker, and the current market price is $1.56 per can of tennis balls (the price at which manufacturers sell to retailers). What is the target full product cost of producing and selling 2,300,000 cans of tennis balls? Given VJ Walker Industries' current costs, will the company reach the stockholders' profit goals?
If VJ Walker Industries cannot change its fixed costs, what is the target variable cost per can of tennis balls?
Suppose VJ Walker Industries could spend an extra $70,000 on advertising to differentiate its product so that it could be a price-setter. Assuming the original volume and costs, plus the $70,000 of new advertising costs, what cost-plus price will VJ Walker Industries want to charge for a can of tennis balls?
Dean, Inc. has just asked VJ Walker Industries to supply the company with 250,000 cans of tennis balls at a special order price of $0.90 per can. Dean, Inc. wants VJ Walker Industries to package the tennis balls under the Dean, Inc. label (VJ Walker Industries will imprint the Dean, Inc. logo on each tennis ball and can). VJ Walker Industries will have to spend $30,000 to change the packaging machinery. Assuming the original volume and costs, should VJ Walker Industries accept this special order? (Assume VJ Walker Industries will incur variable selling costs as well as variable manufacturing costs related to this order.)
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