Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are ty
ID: 2425785 • 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 $22 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.)
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
Statement showing computations Particulars Amount Variable cost per crate: Direct Materials 5.50 Direct Labour 10.50 Variable Overhead 3.90 Incremental Cost per Crate for Normal Order 19.90 Statement showing computations Particulars Amount Variable cost per crate: Direct Materials 5.50 Direct Labour 10.50 Variable Overhead (3.90 - .50) 3.40 Additional cost of the label 1.00 Incremental Cost per Crate for special Order 20.40 Total Crates in special order 5,000.00 Total costof special order 102,000.00