Homework Help is Here – Start Your Trial Now!
Business
Accounting
Sweet Wave Bakery normally produces sourdough bread on a regular basis. It sells approximately 35,000 of this type of bread each year at $3.90 per loaf. The variable costs for each loaf of bread are $2.30. Sunshine bakery in Miami has not been able to produce enough sourdough bread loaves to meet customer demands. They would like to purchase 15,000 loaves for $2.60 per loaf. Sweet Wave's sourdough bread line is near full capacity. In order to accept the order from Sunshine, Sweet Wave would have to temporarily add a 3rd shift to their sourdough line. This would increase the variable manufacturing costs by $.30 per loaf but variable selling costs would decrease by.20 per loaf. A restaurant has requested to purchase a special order of the sourdough bread. They are requesting 2,000 loaves. Sweet Wave has the capacity for this order without adding the additional shift. The restaurant is willing to pay $3.10 per loaf of bread. Instructions A. Given the information above: What are the consequences of Sweet Wave agreeing to provide the 15,000 units to Sunshine Bakery? Would this be a wise "special order" to accept? For negative answers, include "-" before the response. Revenue Cost Net Income Reject Order $0 $0 $0 Accept Order $ $ $ Should Sweet Wave accept the special order? Net Income Increase/Decrease +

Sweet Wave Bakery normally produces sourdough bread on a regular basis. It sells approximately 35,000 of this type of bread each year at $3.90 per loaf. The variable costs for each loaf of bread are $2.30. Sunshine bakery in Miami has not been able to produce enough sourdough bread loaves to meet customer demands. They would like to purchase 15,000 loaves for $2.60 per loaf. Sweet Wave's sourdough bread line is near full capacity. In order to accept the order from Sunshine, Sweet Wave would have to temporarily add a 3rd shift to their sourdough line. This would increase the variable manufacturing costs by $.30 per loaf but variable selling costs would decrease by.20 per loaf. A restaurant has requested to purchase a special order of the sourdough bread. They are requesting 2,000 loaves. Sweet Wave has the capacity for this order without adding the additional shift. The restaurant is willing to pay $3.10 per loaf of bread. Instructions A. Given the information above: What are the consequences of Sweet Wave agreeing to provide the 15,000 units to Sunshine Bakery? Would this be a wise "special order" to accept? For negative answers, include "-" before the response. Revenue Cost Net Income Reject Order $0 $0 $0 Accept Order $ $ $ Should Sweet Wave accept the special order? Net Income Increase/Decrease +

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please do not give solution in image format thanku
Sweet Wave Bakery normally produces sourdough bread on a regular basis. It sells approximately 35,000 of this type of bread each year at $3.90 per loaf. The variable costs for each loaf of bread are $2.30. Sunshine bakery in Miami has not been able to produce enough sourdough bread loaves to meet customer demands. They would like to purchase 15,000 loaves for $2.60 per loaf. Sweet Wave's sourdough bread line is near full capacity. In order to accept the order from Sunshine, Sweet Wave would have to temporarily add a 3rd shift to their sourdough line. This would increase the variable manufacturing costs by $.30 per loaf but variable selling costs would decrease by .20 per loaf. A restaurant has requested to purchase a special order of the sourdough bread. They are requesting 2,000 loaves. Sweet Wave has the capacity for this order without adding the additional shift. The restaurant is willing to pay $3.10 per loaf of bread. Instructions A. Given the information above: What are the consequences of Sweet Wave agreeing to provide the 15,000 units to Sunshine Bakery? Would this be a wise "special order" to accept? For negative answers, include "-" before the response. Revenue Cost Net Income Reject Order $0 $0 $0 Accept Order $ $ Should Sweet Wave accept the special order? Net Income Increase/Decrease $ +
Transcribed Image Text:Sweet Wave Bakery normally produces sourdough bread on a regular basis. It sells approximately 35,000 of this type of bread each year at $3.90 per loaf. The variable costs for each loaf of bread are $2.30. Sunshine bakery in Miami has not been able to produce enough sourdough bread loaves to meet customer demands. They would like to purchase 15,000 loaves for $2.60 per loaf. Sweet Wave's sourdough bread line is near full capacity. In order to accept the order from Sunshine, Sweet Wave would have to temporarily add a 3rd shift to their sourdough line. This would increase the variable manufacturing costs by $.30 per loaf but variable selling costs would decrease by .20 per loaf. A restaurant has requested to purchase a special order of the sourdough bread. They are requesting 2,000 loaves. Sweet Wave has the capacity for this order without adding the additional shift. The restaurant is willing to pay $3.10 per loaf of bread. Instructions A. Given the information above: What are the consequences of Sweet Wave agreeing to provide the 15,000 units to Sunshine Bakery? Would this be a wise "special order" to accept? For negative answers, include "-" before the response. Revenue Cost Net Income Reject Order $0 $0 $0 Accept Order $ $ Should Sweet Wave accept the special order? Net Income Increase/Decrease $ +
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost classification
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS