Simpson Company sells its famous seafood sandwiches from a rented food truck. Simpson has no inventories. The business has the capacity to sell up to 35,000 sandwiches per year. The table below summarizes sandwich costs for 20X1 (sold 10,000 sandwiches) and 20X2 (sold 20,000 sandwiches): Cost summary 10,000 sandwiches 20,000 sandwiches Materials $55,000 $110,000 Salaries and rent $50,000 $50,000 Totals $105,000 $160,000 What would be the total projected cost for 30,000 sandwiches? In July, 20X3 Simpson has the opportunity to bid on a special order for sandwiches for a party. Simpson wants to do the party for marketing purposes and is willing to sell the sandwiches for less than the normal $15.00 to get the job. Accepting the special order will not reduce any sales to normal customers. What is the lowest selling price (per sandwich) Simpson should be willing to consider? (At what price will the special order not reduce income for the business?)

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Part 1 Total Projected Cost for 30000 Sandwiches The cost of production increases linearly with the number of sandwiches sold because Simpson has no f... View the full answer