This topic contains a solution. Click here to go to the answer

Author Question: Saguaro Company is a leading producer of disposable chop sticks and other utensils. One of the ... (Read 45 times)

sbegs

  • Full Member
  • ***
  • Posts: 142
Saguaro Company is a leading producer of disposable chop sticks and other utensils. One of the company's major product lines is high-quality chop sticks which are sold to some of the country's best Asian restaurants, including large national chains. Each set of chop sticks is sold at a price of $0.38 per pair. To maintain its high-quality image, Saguaro uses a thick premium wood, a special varnish, and individually wraps each pair of chop sticks. Based on annual production of 5,000,000 sets of chop sticks, Saguaro's cost for producing a pair of chop sticks is as follows:

Wood$0.05
Varnish0.02
Direct labor0.05
Variable overhead0.08
Fixed overhead  0.10
   Total cost per pair$0.30

Sharon Steele is opening a new Asian restaurant in her hometown. She recently contacted one of Saguaro's top salespeople, Simon Green, about purchasing utensils for her new restaurant. Simon described Saguaro's products, emphasizing the high-quality materials and processes the company uses. Sharon is looking for ways to lower her operating costs, so after hearing Simon describe Saguaro's products, she told him that all she wants are 20,000 unwrapped chop sticks. Sharon told Simon she is willing to pay $0.09 per chop stick ($0.18 per pair).

Required
a.Based on Sharon's offer of $0.09 per chop stick, should Saguaro accept Sharon's
order? Saguaro currently has excess production capacity and can easily accommodate Sharon's order in the production schedule.

b.Since Sharon wants simple chop sticks, Simon is exploring using a lighter-weight
wood for her order. He has found a suitable product that will cost $.02 per chop stick. If Saguaro uses this lighter-weight wood for Sharon's order, should the company accept Sharon's order at a price of $0.09 per chop stick? Saguaro currently has excess production capacity and can easily accommodate Sharon's order in the production schedule.

c.After visiting with Sharon, Simon received a fax from one of Spain's top Asian
restaurants. The restaurant's normal utensil supplier suffered some earthquake damage and is unable to ship the restaurant's order of 20,000 pairs of chop sticks this month. The restaurant's owner is asking if Saguaro can fill a one-time rush order of 20,000 pairs of chop sticks. The restaurant is willing to pay an 8% price premium to expedite the order. If Saguaro accepts the order, it will incur $2,250 in export taxes and shipping. Should Saguaro accept the Spanish restaurant's offer?

d.What qualitative issues should Saguaro consider as it evaluates both Sharon's order
and the Spanish restaurant's order? Are these issues different for the two orders?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by sbegs on Feb 5, 2023

reason44

  • Full Member
  • ***
  • Posts: 162
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 50% of students answer this correctly




sbegs

  • Member
  • Posts: 142
Reply 2 on: Feb 5, 2023
:D TYSM


bigcheese9

  • Member
  • Posts: 333
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

For a complete list of videos, visit our video library