Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of $50 per case (a case contains 24 cans of nuts). Kaune sold 155.000 cases last year to the following three classes of customer: Price per Case Customer Supermarkets Small grocers Convenience stores 567 96 88 Cases Sold The supermarkets require special labeling on each can costing $0.03 per can. They order through electronic data interchange (EDI), which costs Kaune about $56.000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs $43.000 per year The small grocers order in smaller lots that require special picking and packing in the factory: the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 7 percent of sales. Bad debts expense amounts to 8 percent of sales. Convenience stores also require special handling that costs $27 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of $12.000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of $24,000 per year. Required: Supermarkets Small grocers Convenience stores 80,000 45,000 30.000 1. Calculate the total cost per case for each of the three customer classes. Round intermediate calculations and final answers to four decimal places. Use the rounded values for subsequent requirements Total Cost Per Case Supermarkets Small grocers Convenience stores 2. Using the costs from Requirement 1. calculate the profit per case per customer class. Round intermediate computations to four decimal places and final answers to two decimal places. Profit Percentage Per Case s %
Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of $50 per case (a case contains 24 cans of nuts). Kaune sold 155.000 cases last year to the following three classes of customer: Price per Case Customer Supermarkets Small grocers Convenience stores 567 96 88 Cases Sold The supermarkets require special labeling on each can costing $0.03 per can. They order through electronic data interchange (EDI), which costs Kaune about $56.000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs $43.000 per year The small grocers order in smaller lots that require special picking and packing in the factory: the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 7 percent of sales. Bad debts expense amounts to 8 percent of sales. Convenience stores also require special handling that costs $27 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of $12.000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of $24,000 per year. Required: Supermarkets Small grocers Convenience stores 80,000 45,000 30.000 1. Calculate the total cost per case for each of the three customer classes. Round intermediate calculations and final answers to four decimal places. Use the rounded values for subsequent requirements Total Cost Per Case Supermarkets Small grocers Convenience stores 2. Using the costs from Requirement 1. calculate the profit per case per customer class. Round intermediate computations to four decimal places and final answers to two decimal places. Profit Percentage Per Case s %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
account
Transcribed Image Text:Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of $50 per case (a case contains 24 cans of nuts). Kaune sold 155,000 cases last year to the following three classes of customer:
Price per
Case
271
$67
Small grocers
96
Convenience stores
88
Customer
Supermarkets
Supermarkets
Small grocers
Cases
Sold
Supermarkets
Small grocers
80,000
The supermarkets require special labeling on each can costing $0.03 per can. They order through electronic data interchange (EDI), which costs Kaune about $56,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs $43,000 per year.
The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 7 percent of sales. Bad debts expense amounts to 8 percent of sales.
Convenience stores also require special handling that costs $27 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of $12,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of $24,000 per year.
Required:
Convenience stores
45,000
1. Calculate the total cost per case for each of the three customer classes. Round intermediate calculations and final answers to four decimal places. Use the rounded values for subsequent requirements.
Total Cost Per Case
30,000
Convenience stores
2. Using the costs from Requirement 1, calculate the profit per case per customer class. Round intermediate computations to four decimal places and final answers to two decimal places.
Profit Percentage Per Case
%
%
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education