***PLEASE ANSWER PART C*** Sandhill Packaging Company is a leading manufacturer of cardboard boxes and other product pac

[answerhappygod]

***PLEASE ANSWER PART C***
Sandhill Packaging Company is a leading manufacturer of
cardboard boxes and other product packaging solutions. One of the
company’s major product lines is custom-printed cake boxes that are
sold to some of the country’s best known bakeries at a price of
$0.50 per box. To maintain its high-quality
image, Sandhill uses a thick premium coated paper for all
of its cake boxes. Based on annual production of 1,000,000
boxes, Sandhill’s cost for producing a box is as
follows:
Michelle Walker, a recent graduate of the Culinary Institute
of America, is opening a new bakery in her hometown. She recently
contacted Brad Lail, Sandhill’s top salesperson, about
purchasing cake boxes for her new store. Brad
described Sandhill’s boxes, emphasizing the high-quality paper
and the unique printing process the company uses. Andrea is looking
for ways to lower her operating costs, so after hearing Brad
describe Sandhill’s boxes, she told him that all she needed
was a simple, unprinted box. Andrea also told Brad that she
needs 10,800 boxes and is willing to pay $0.25 per
box.
a) Based on Andrea’s offer of $0.25 per box for an
unprinted box, should Sandhill accept Andrea’s
order? Sandhill currently has excess production capacity
and can easily accommodate Andrea’s order in the production
schedule.
b) Since Andrea wants a simple box, Brad is exploring using a
lighter-weight paper for her boxes. He has found a suitable paper
that will cost $0.07 per box. If Sandhill uses this
lighter-weight paper for Andrea’s boxes, should the company accept
Andrea’s order at a price of $0.25 per
box? Sandhill currently has excess production capacity
and can easily accommodate Andrea’s order in the production
schedule.
c) After visiting with Andrea, Brad received a fax from one of
London’s top bakeries. The bakery’s normal box supplier suffered
some fire damage and is unable to ship the bakery’s order
of 10,800 boxes this month. The bakery’s owner is asking
if Sandhill can fill a onetime rush order
of 10,800 boxes printed with the bakery’s logo. The
bakery is willing to pay a 10% price premium to expedite the order.
If Sandhill accepts the order, it will incur $816 in
export taxes and shipping.
Calculate the Profit on special order.