Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are ty
ID: 2378685 • Letter: P
Question
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory:
Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to pay Poppycrock $20 per crate for a special-order batch of 5,000 crates. The special-order popcorn would include a unique label with information about the Boys and Girls of Canada. The additional cost of the label is estimated at $1.00 per crate. In addition, the variable overhead for these special-order crates would decrease by $0.50 because there would be no distribution costs.
What is the incremental cost of creating a normal crate of popcorn? A special-order crate of popcorn?(Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Show the impact on Poppycrock's monthly operating profit if they accept the offer and they are producing and distributing 30,000 normal crates per month. What is the opportunity cost of not accepting the offer? (Input all amounts as positive values. Round your answers to 2 decimal places. Omit the "$" signs in your response.)
Monthly operating profit when distributing the normal 30,000 crates can be found by multiplying the contribution margin by the number of crates sold and deducting fixed expenses as follows: CM = $
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory:
Explanation / Answer
What is the incremental cost of creating a normal crate of popcorn?
direct material=4.50
direct labor=10.50
variable overhead=3.60
incremental cost =18.60 answer