Bene PetitFirst year operating data:Single(1 serving)Family(4 servings)Dual(2 servings)TotalCustomer Meals Sold3,0005,00012,00020,000Total Customer Servings3,00010,00048,00061,000Customer Orders(Average = 4 meals per order)7501,2503,0005,000Number of Donated Meals(1 per customer meal)3,0005,00012,00020,000Number of Donated Deliveries(500 meals per delivery)6.102440Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-sized. Single-serve mealsmake up about 5% of total sales revenue and have the lowest contribution margin of the three products. Tayloris trying to decide whether to eliminate single-serve meal kits but is unsure how it would affect profit and thenumber of meals donated to homeless families. The following additional details are available:The variable costs of the single serve meals (as well as the donated meals) could be avoided.About 10% of the fixed costs that are currently allocated to the single serve meals could beavoided.Taylor believes that about 25% of single serve customers would switch to dual-serving meals, butwould reduce their order size to from 4 meals per week to 2 meals per week.Should Taylor eliminate the single-serve meals from her product/service offering? Why or why not?

Decision-Making-Decision-making is a fundamental managerial skill required to run an organization…

Answered: Should Taylor eliminate the…

Business

Accounting

Should Taylor eliminate the single-serve meals from her product/service offering? Why or why not?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: In terms of costing, how would car makers will solve the problem of having cheap cars dissapear?

A: Manufacturing processes area unit generally complicated and consume giant amounts of resources.…

Q: In a perfectly competitive market, which of the following statements is true? Options: A. Firms have…

A: The objective of the question is to identify the correct statement about a perfectly competitive…

Q: “ Managers must decide whether a product should be sold at splitoff or processed furthur.The sales…

A: No, any method that is used to assign costs to individual products that is applied to the problem of…

Q: Do you think distributor storage with last mile delivery is good for the automotive spare industry?…

A: The walk – linking your business with the top client through a dealer network – is important for…

Q: When should a company use absorption costing when setting sales prices? When should it use variable…

A: Variable Costing: "Variable costing is a method that allocates only variable manufacturing costs to…

Q: Rachel Inc. is deciding whether to continue to manufacture a component or to buy the component from…

A: The objective of the question is to identify which of the given options is not relevant to the…

Q: Prentice Company is considering dropping one of its product lines. What costs of the product…

Q: Do you think that the pandemic and shortages could cause some companies to decide to use a different…

A: The costing methods are the methods that are used by companies to determine the total cost incurred…

Q: When a firm redesigns a product to reduce the number of component parts, the firm is Group of answer…

A: Redesigning products is done for a wide range of reasons. First, clients' requirements may alter or…

Q: Which of the following statements is false? Multiple Choice Examples of selling costs include…

A: Costs incurred can be of three types;manufacturing,selling and,administrative.Where manufacturing…

Q: What characteristics about the non-profit homeless shelter suggest the hybrid cost system is what…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: When making special order decisions, if there is not available capacity to complete the special…

A: When making special order decisions, managers need to consider various factors before accepting or…

Q: "Sunk costs are considered by a manufacturer in decision making". Do you agree? Explain.

A: "Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: How do you decompose the ROE with the DuPont analysis for Walmart?

A: DUPONT is very important relationships that show how return on equity is related to profit margin…

Q: If Green Caterpillar Garden Supplies Inc.’s managers select projects based on the MIRR criterion,…

A: You have asked a question. A solution was provided to you. You have asked a follow up question. It's…

Q: Product A B с Product A Each product can be processed further after the split-off point. Additional…

A: Financial advantage and disadvantage of further processing of any product is based on total…

Q: o alternatives for prod

A: The two alternatives for product costing systems are job costing and process costing. Job Costing:…

Q: nald’s French fries? What are some period cost related to the manufacture and sale of McDonald’s…

A: About McDonald's - It is one of the leading fast food company founded in 1940 in America

Q: survive. In addition to death, however, one could also say that self-sufficiency is boredom or…

A: Trade is considered beneficial for people across the globe as they help the consumer to choose…

Q: As a start-up company, Blue Enterprises encourages its employees to think through the entire value…

A: I can help you understand the different parts of the question and the relevant accounting…

Q: The decision to accept or reject a special order and the selection of a price for a special order…

Q: In order to correct the problems associated with external costs. O standards must be established…

A: External cost refers to cost associated with social or environmental effects.

Q: Why should a standard cost that is higher than an actual cost be of concern to management? Utilize…

A: Solution Concept Standard cost Standard cost means the cost that is expected to be…

Q: Which of the following statements about a sunk cost is false? Question 11Answer a. It is relevant to…

A: In cost accounting, several type of cost classifications are there. These are like direct costs,…

Q: The entity uses paper-based packaging for its food items. However, it had no choice but to continue…

A: Production means those costs incurred during the manufacturing of an item. It includes both direct…

Q: Within the general functions of packaging, specific functions are performed. One of those specific…

A: The objective of the question is to identify the correct definition of 'apportionment' within the…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: How do we decide whether to accept a special order? Which costs are relevant? What other factors…

A: Since multiple questions have been posted, as per the guidelines only the first question will be…

Q: IS a outsource?

A: Outsourcing is the process of hiring a third party to perform the company's services that are…

Q: For the reader's advantage, provide a cost-benefit analysis of the project. How can the value of a…

A: An analysis is a systematic procedure used by businesses to determine which decisions to make and…

Q: Dorsey Company manufactures three products from a common input in a joint processing operation.…

A: Solution 1: Financial advantage (disadvantage) to determine which product to be sold at…

Q: Apple is considering eliminating one of its stores in a large U.S. city. What are some factors that…

Q: State with a brief reason, the appropriate pricing policy that should be adopted in the following…

A: Every company needs to price its product according to their cost parameters. Pricing policies forms…

Q: Which of the following statements best describes a by-product? Multiple Choice A product created…

A: A by-product is comparably lesser in terms of the total amount and is derived incidentally from the…

Q: Which of the following is NOT an actor in the microenvironment? Question 4 options:…

A: The objective of the question is to identify which among the given options is not an actor in the…

Q: Why do proponents of absorption costing argue that absorption costing is preferable as the basis for…

A: The absorption costing argue that absorption costing is preferable as the basis for pricing…

Q: Which of the following decreases the non-value added time of producing a product and in turn…

A: Subassemblies service:It is a service offered by the manufacturer who do not have adequate time and…

Q: The company director of the marketing department, stated that the company should not adopt…

A: The Activity Based Costing (ABC) is the method which is widely followed by most of the companies,…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Bene Petit
First year operating data:
Single
(1 serving)
Family
(4 servings)
Dual
(2 servings)
Total
Customer Meals Sold
3,000
5,000
12,000
20,000
Total Customer Servings
3,000
10,000
48,000
61,000
Customer Orders
(Average = 4 meals per order)
750
1,250
3,000
5,000
Number of Donated Meals
(1 per customer meal)
3,000
5,000
12,000
20,000
Number of Donated Deliveries
(500 meals per delivery)
6.
10
24
40
Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-sized. Single-serve meals
make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor
is trying to decide whether to eliminate single-serve meal kits but is unsure how it would affect profit and the
number of meals donated to homeless families. The following additional details are available:
The variable costs of the single serve meals (as well as the donated meals) could be avoided.
About 10% of the fixed costs that are currently allocated to the single serve meals could be
avoided.
Taylor believes that about 25% of single serve customers would switch to dual-serving meals, but
would reduce their order size to from 4 meals per week to 2 meals per week.
Should Taylor eliminate the single-serve meals from her product/service offering? Why or why not?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction of Decision-Making

VIEW

Step 2: Explanation of Impact of Taylor should eliminate single-serve meals

VIEW

Step 3: Calculation of the Impact of Taylor should eliminate single-serve meals

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

Which pharmacoeconomic evaluation can overcome the problem of acceptability threshold being a judgment call? O Cost benefit O Cost effectiveness O Cost utility O Cost minimization The expected price for the provider which enable him/her to provide the service or the product is also known as: O Opportunity cost O Capital cost O Allowable charge O sticker price
Why is it important to compare standard and actual food and beverage costs?
Ma3. 1) [One word answer].____________ A pool describes a quantity discount for buying multiple different products at the same time which collectively qualify for the discount level. Your answer: 2) [One word answer]. The planning canvas that includes "unfair advantage" is the______________ canvas. Your answer: 3) Which of these provides unlimited intellectual property protection, if properly handled? A. Industrial design B. Patent C. Copyright D. Trade secret
Identify the two ways for reducing product costs to a predetermined level. Which is more widespread within the consumer electronics industry? In the industries that manufacture specialised machinery?
Why do companies allocate costs? What are some of the advantages and disadvantages to doing so?
Why might a manufacturer chooseto hire a third-party logistics firm rather than a conventional wholesaler or distributor?
How does lean manufacturing differ from the conventional manufacturing process?
Which of the following is not a reason for banks to use activity-based costing? a.to determine service quality b.to determine profitability of services provided c.to determine the amounts charged to customers for services provided d.All of these choices are correct.
How cost accounting covers the problem of Evaluation of alternative while buying
How has the move to producing standard furniture affected the com-pany’s financial structure?
If you were a small business owner would you implement an activity based costing system? What potential benefits or pitfalls do you foresee? The answer doesn't have to be long.
Many fast food chains, such as McDonald's, will occasionally discontinue restaurants in their system. What are some financial considerations in deciding to eliminate a store? In other words, what does McDonald's need to take into consideration when making this type of decision. In addition, do you think there are other non-financial measures should be considered?