Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your answer is partially correct. Try again Crane Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the
Your answer is partially correct. Try again Crane Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company's major product lines is custom-printed cake boxes that are sold to some of the country's best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Crane uses a thick premium coated paper for all of its cake boxes. Based on annual production of 1,000,000 boxes, Crane's cost for producing box is as follows: a Paper $0.14 Ink 0.04 Direct labor 0.06 Variable overhead 0.07 Fixed overhead 0.10 Total cost per box $0.41 Andrea Borden, a recent graduate of the Culinary Institute of America, is opening Crane's top salesperson, about purchasing cake boxes for her new store. Brad described Crane's boxes, emphasizing the high-quality paper and the unique printing process the company uses. Andrea is looking for ways to lower her operating costs, so after hearing Brad describe Crane's boxes, she told him that all she needed was a simple, unprinted box. Andrea also told Brad that she needs 9,200 boxes and is willing to pay $0.24 per box a new bakery in her hometown. She recently contacted Brad Lail, (a) Based on Andrea's offer of $0.24 per box for an unprinted box, should Crane accept Andrea's order? Crane currently has excess production capacity and can easily accommodate Andrea's order in the production schedule. (c) After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered some fire damage and is unable to ship the bakery's order of 9,200 boxes this month. The bakery's owner is asking if Crane can fill a onetime rush order of 9,200 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expedite the order. If Crane accepts the order, it will incur $798 in export taxes and shipping Calcuate the Profit on special order. Profit on special order $3 Should Crane accept the London bakery's offer
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started