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The following data pertains to Takeya, a cap manufacturer. Capacity 1,800,000 Current production and sells 1,500,000...

The following data pertains to Takeya, a cap manufacturer. Capacity 1,800,000 Current production and sells 1,500,000 Unit Price $0.40 Unit Variable Costs Manufacturing $0.20 S&A $0.10 Total Fixed Costs Manufacturing $51,000 S&A $24,000

A bottle producer, BottleIt has contacted Takeya about purchasing 150,000 units at $0.35 each. In addition, another customer, Beer Incorporated, wants 300,000 units (all or nothing). Takeya cannot accept both orders. For the Beer Inc. only 50% of the variable selling and administrative costs would be incurred. What is Takeya’s minimum price for Beer Inc.?

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Answer #1

2) 300000 unit Beer Inc.
Varaible cost
Manufacturing Cost $0.20
S & A Cost ( $ 0.10 * 50%) $0.05
Total Variable cost $0.25
Takeya's minimum price for Beer Inc. $ 0.25 that Takeya's Can recover his cost
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