Lancashire Corporation produces bottled water with an average production cost of $2 per can (one can contains 24 bottles). Lancashire sold 1,000,000 cases to the following customer types last year:

CUSTOMER	PRICE PER BOX	CASE SOLD
pharmacy chains	5,00 $	375.000
gas station chains	$5.50	125.000
supermarket chains	$6.50	500.000
local pharmacies	6,00 $	250.000

Pharmacy chains have special handling costs of $0.20 per case and increased administrative aid costs of $45,000 per year.

Gas station chains require special marketing promotions that cost $50,000. 10% sales commission is paid.

Supermarket chains place orders electronically via EDI, which costs $25,000 a year. Lancashire is responsible for shipping costs totaling $0.50 per case and private labels of $0.02 per bottle.

Local pharmacies have special processing costs of $0.10 per case and agents are paid a sales commission of $0.25 per case. Bad debt expense accounts for an average of 10% of sales.

What is the profit per case of pharmacy chains?

Answer rating: 100% (QA)

To calculate the profit per case of pharmacy chains we need to consider all the relevant costs and r... View the full answer