Henry Sweet Company currently makes 6-inch candy sticks that it sells for $0.20 each. Henry can make 12-inch candy sticks out of two 6-inchcandy sticks by melting them together, which costs an additional $0.03 per 12-inch stick. Henry can sell the 12-inch sticks for $0.45. Henry hasenough capacity to make 10,000 6-inch candy sticks per month, and enough demand to sell all of the candy sticks it can manufacture, whether 6-inch or 12-inch. Should Henry sell 6-inch or 12-inch candy sticks, and how much additional profit will its decision bring in per month?Multiple ChoiceOOSell 6-inch sticks, additional $100Sell 6-inch sticks, additional $250Sell 12-inch sticks, additional $100Sell 12-inch sticks, additional $250

Incremental Analysis :— This analysis shows the comparison between two different alternatives. A…

Answered: Henry Sweet Company currently makes…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6EB: Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...

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Gooby Gummies makes taffy candy, which it sells at local supermarkets. The fixed monthly cost to produce the candy is $4,000. The main ingredient for the candy, glucose syrup costs $0.21 per pound. Gooby Gummies sells the taffy for $0.75 per pound to supermarkets.The management of Gooby Gummies is thinking of raising the price of the taffy candy to $0.95 per pound. Currently, the company produces and sells 9,000 pounds of taffy candy a month. The management realizes that if they raise the price, the sales will go down to 5,700 pounds per month. By how much will the company's profit per year be affected if Gooby Gummies' management decide to raise the price? Should the company raise its price? Explain your answer.
Gooby Gummies makes taffy candy, which it sells at local supermarkets. The fixed monthly cost to produce the candy is $4,000. The main ingredient for the candy, glucose syrup costs $0.21 per pound. Gooby Gummies sells the taffy for $0.75 per pound to supermarkets. The management of Gooby Gummies is thinking of raising the price of the taffy candy to $0.95 per pound. Currently, the company produces and sells 9,000 pounds of taffy candy a month. The management realizes that if they raise the price, the sales will go down to 5,700 pounds per month. By how much will the company's profit per year be affected if Gooby Gummies' management decide to raise the price? Should the company raise its price? Explain your answer.
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Curate Furniture approached Jansen about buying 1,200 shelves for bookshelves it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jensen accepts the special order?
Carondelet Coffee has begun making and selling pastries. The fixed costs of making the pastry are $4,000, and the company estimates that the variable costs are $.75 per pastry. How many pastries does Carondelet have to sell to earn net income of $5,000 if it sells each pastry for $3 apiece?
Casey’s Cases sells cell phone cases in a mall kiosk. Casey charges $42 per case. The variable cost for a case, including the case, the royalty paid to the mall, and so on is $32. The monthly fixed cost for Casey’s Cases is $3,250. Required: How many cases must Casey sell every month to break even? Casey believes that he can sell 385 cases a month. What is the margin of safety in terms of the number of cases?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case.The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?A. Profits will decrease by $1,200.B. Profits will increase by $31,200.C. Profits will increase by $600.D. Profits will increase by $7,200.
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Yaad Peanut is a company in Jamaica. They produce peanut butter. Each jar sells for $800. thecompany incurs a variable cost of $100 per jar of peanut butter and fixed cost of $2,000,000 perannum. In this period, they are able to produce 200,000 jars. Write a formula for the total revenue and the total cost incurred by Yaad Peanut Determine when Yaad Peanut can break even
Crane, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $30 and are sold for $40. Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $280,800 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year. Crane, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $28. What would be the new contribution margin per unit if managers switched to the new supplier? What would be the new breakeven point if managers switched to the new supplier? (Use contribution margin per unit to calculate breakeven units. Round answers to 0 decimal places, e.g. 25,000.)
Crane, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $30 and are sold for $40. Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $280,800 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year. How many pitchers of each type must be sold to break even in the coming year? (Use contribution margin per unit to calculate breakeven units.)
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