Question 1
Manufacturing cycle times affect both revenues and costs. Explain.
Question 2
| Relevant items | Cookies with cashew and honey | Plain cookies | Difference |
| | | | |
| Expected revenue | $850,000 | $725,000 | $125,000 |
| Expected variable costs | 548,000 | 418,000 | (130,000) |
| Expected inventory carrying cost | 32,000 | 22,000 | (10,000) |
| Expected total costs | 580,000 | 440,000 | (140,000) |
| Expected profits | $270,000 | $285,000 |
$(15,000) |
Dulcet Foods, Inc., has the option to sell either of the variant. Which one is a better alternative?
