Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few da

[answerhappygod]

Mercia Chocolates Produces Gourmet Chocolate Products With No Preservatives Any Production Must Be Sold Within A Few Da 1 (181.91 KiB) Viewed 33 times

Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia's single plant has the capacity to make 97,000 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern's Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern's orders 60,400 packages and Mega Stores orders 22,000 packages annually. Variable manufacturing costs are $24 per package, and annual fixed manufacturing costs are $627,000. The gourmet chocolate business has two seasons, holidays and non-holidays. The holiday season lasts exactly four months and the non-holiday season lasts eight months. Vern's orders the same amount each month, so Vern's orders 19,200 packages during the holidays and 41,200 packages in the non-holiday season. Mega Stores only carries Mercia's chocolates during the holidays. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. b. Calculate the product cost for each season with excess capacity costs assigned to season requiring it. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. (Round your intermediate calculations and final answers to 2 decimal places.) Product Cost Non-holiday Holiday per package per package