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

Question:

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

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 100,000 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 55,000 packages and Mega Stores orders 25,000 packages annually. Variable manufacturing costs are $30 per package, and annual fixed manufacturing costs are $740,000. Required: What cost per package should the cost system report? (Round your intermediate calculations and final answers to 2 decimal places.) Cost per package at capacity Cost per package at demand

Answers

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

DE Answer 3 Part 1) 4 Cost Per Package at Capacity 5 = variable cost + (fixed manufacturing cost / Capacity in terms of packa

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