A factory makes canned tomatoes. These cans are sold to various grocery store chains under their respective generic-bran

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A Factory Makes Canned Tomatoes These Cans Are Sold To Various Grocery Store Chains Under Their Respective Generic Bran 1 (60.47 KiB) Viewed 13 times

A factory makes canned tomatoes. These cans are sold to various grocery store chains under their respective generic-brands. Current capacity if 40 million cans. At the current annual production level of 35 million cans, the factory has the following financial information (per 1,000 cans)< Selling Price $750 < Fixed costs $400 Variable costs $320 Net Income $ 30 804 Health-E-Foods, a new competitor in the grocery industry has approached the factory to purchase 7 million cans per year. Health-E-Foods would like the canned tomatoes to compete with high-end healthy canned tomatoes sold by other grocery stores. In order to obtain this contract, there is a required change to the production process that will require a different mix of food preservatives - this will increase the variable costs by $60 per 1,000 cans. As well, the change in food preservatives will require an improved quality control department and certified food chemists be on staff - this will cost an additional $250,000 per year.< H You have just learned that Health-E-Foods recently cancelled a contract with one of your competitors because they could not adapt to the new production requirements.< What is the indifference point for this special offer?< H Whare are the qualitative factors that should be considered?< له له