Can't figure out bottom section for the fire damage portion. (c)Your answer is partially correct.After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered somefire damage and is unable to ship the bakery's order of 11,200 boxes this month. The bakery's owner is asking if Blossom can fill aonetime rush order of 11,200 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expeditethe order. If Blossom accepts the order, it will incur $ 820 in export taxes and shipping.Calculate the Profit on special order.$783Profit on special orderShould Blossom accept the London bakery's offer?Blossom shouldaccept the special order. Blossom Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of thecompany's major product lines is custom-printed cake boxes that are sold to some of the country's best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Blossom uses a thick premium coated paper for all of its cake boxes. Based on annualproduction of 1,000,000 boxes, Blossom's cost for producing a box is as follows:Раper$0.14Ink0.03Direct labor0.05Variable overhead0.09Fixed overhead0.09Total cost per box$0.40Sarah Allen, a recent graduate of the Culinary Institute of America, is opening a new bakery in her hometown. She recently contactedBrad Lail, Blossom's top salesperson, about purchasing cake boxes for her new store. Brad described Blossom's boxes, emphasizing thehigh-quality paper and the unique printing process the company uses. Andrea is looking for ways to lower her operating costs, so afterhearing Brad describe Blossom's boxes, she told him that all she needed was a simple, unprinted box. Andrea also told Brad that sheneeds 11,200 boxes and is willing to pay $0.24 per box.(a)Your answer is correct.Based on Andrea's offer of $ 0.24 per box for an unprinted box, should Blossom accept Andrea's order? Blossom currently hasexcess production capacity and can easily accommodate Andrea's order in the production schedule.Blossom should not accept the order.

Sales Price for special order = Normal sales price + premium = 0.50 + 0.50*10% = $0.55 per unit

Answered: Your answer is partially correct. After…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Can't figure out bottom section for the fire damage portion.

Transcribed Image Text:(c) Your answer is partially correct. After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered some fire damage and is unable to ship the bakery's order of 11,200 boxes this month. The bakery's owner is asking if Blossom can fill a onetime rush order of 11,200 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expedite the order. If Blossom accepts the order, it will incur $ 820 in export taxes and shipping. Calculate the Profit on special order. $ 783 Profit on special order Should Blossom accept the London bakery's offer? Blossom should accept the special order.