$\backslash (\backslash$$ $1,778,000\backslash ).$ The variable cost of making and selling each can of tennis balls is $\backslash (\backslash$$ $0\mathrm{.}70\backslash ).$ Stockholders expect a $\backslash (6\backslash \%\backslash )$ annual return on the company's $\backslash (\backslash$$ $3,800,000\backslash )$ of assets.

Read the requirements. nearest cent.$)$

Plus:

Total full product costs

Divided by the

Full product cost per can

Requirements

$1.$ What is VJ Walker Industries' current full product cost of making and selling $\backslash (1,700,000\backslash )$ cans of tennis balls? What is the current full unit product cost of each can of tennis balls?

$2.$ Assume VJ Walker Industries is a price$-$taker, and the current market price is $\backslash (\backslash$$ $1\mathrm{.}86\backslash )$ per can of tennis balls $($the price at which manufacturers sell to retailers$).$ What is the target full product cost of producing and selling $1,700,000$ cans of tennis balls? Given VJ Walker Industries' current costs, will the company reach the stockholders' profit goals?

$3.$ If VJ Walker Industries cannot change its fixed costs, what is the target variable cost per can of tennis balls?

$4.$ Suppose VJ Walker Industries could spend an extra $\backslash (\backslash$$ $70,000\backslash )$ on advertising to differentiate its product so that it could be a price$-$setter. Assuming the original volume and costs, plus the $\backslash (\backslash$$ $70,000\backslash )$ of new advertising costs, what cost$-$plus price will VJ Walker Industries want to charge for a can of tennis balls?

$5.$ Pringle, Inc. has just asked VJ Walker Industries to supply the company with $300,000$ cans of tennis balls at a special order price of $\backslash (\backslash$$ $1\mathrm{.}30\backslash )$ per can. Pringle, Inc. wants VJ Walker Industries to package the tennis balls under the Pringle, Inc. label $($VJ Walker Industries will imprint the Pringle, Inc. logo on each tennis ball and can$).$ VJ Walker Industries will have to spend $\backslash (\backslash$$ $50,000\backslash )$ to change the packaging machinery. Assuming the original volume and costs, should VJ Walker Industries accept this special order? $($Assume VJ Walker Industries will incur variable selling costs as well as variable manufacturing costs related to this order.$)$ VJ Walker Industries makes tennis balls. Its only plant can produce as many as $\backslash (2,200,000\backslash )$ cans of tennis balls per year. Current production is $\backslash (1,700,000\backslash )$ cans. Annual manufacturing, selling, and administrative fixed costs total $\backslash (\backslash$$ $1,778,000\backslash ).$ The variable cost of making and selling each can of tennis balls is $\backslash (\backslash$$ $0\mathrm{.}70\backslash ).$ Stockholders expect a $\backslash (6\backslash \%\backslash )$ annual return on the company's $\backslash (\backslash$$ $3,800,000\backslash )$ of assets.

Read the requirements.

Requirement $1.$ What is VJ Walker Industries' current full product cost of making and selling $1,700,000$ cans of tennis balls? What is the current full unit product cost of each can of tennis balls? $($Round the per unit cost to the nearest cent.$)$

Requirement $2.$ Assume VJ Walker Industries is a price$-$taker, and the current market price is $\backslash (\backslash$$ $1\mathrm{.}86\backslash )$ per can of tennis balls $($the price at which manufacturers sell to retailers$).$ What is the target full product cost of producing an selling $\backslash (1,700,000\backslash )$ cans of tennis balls? Given VJ Walker Industries' current costs, will the company reach the stockholders' profit goals?

First, calculate the target full product cost of producing and selling $1,700,000$ cans of tennis balls.

Less:

Target full product cost Requirements

$1.$ What is VJ Walker Industries' current full product cost of making and selling $\backslash (1,700,000\backslash )$ cans of tennis balls? What is the current full unit product cost of each can of tennis balls?

$2.$ Assume VJ Walker Industries is a price$-$taker, and the current market price is $\backslash (\backslash$$ $1\mathrm{.}86\backslash )$ per can of tennis balls $($the price at which manufacturers sell to retailers$).$ What is the target full product cost of producing and selling $1,700,000$ cans of tennis balls? Given VJ Walker Industries' current costs, will the company reach the stockholders' profit goals?

$3.$ If VJ Walker Industries cannot change its fixed costs, what is the target variable cost per can of tennis balls?

$4.$ Suppose VJ Walker Industries could spend an extra $\backslash (\backslash$$ $70,000\backslash )$ on advertising to differentiate its product so that it could be a price$-$setter. Assuming the original volume and costs, plus the $\backslash (\backslash$$ $70,000\backslash )$ of new advertising costs, what cost$-$plus price will VJ Walker Industries want to charge for a can of tennis balls?

$5.$ Pringle, Inc. has just asked VJ Walker Industries to supply the company with $300,000$ cans of tennis balls at a special order price of $\backslash (\backslash$$ $1\mathrm{.}30\backslash )$ per can. Pringle, Inc. wants VJ Walker Industries to package the tennis balls under the Pringle, Inc. label $($VJ Walker Industries will imprint the Pringle, Inc. logo on each tennis ball and can$).$ VJ Walker Industries will have to spend $\backslash$$$50,000$ to change the packaging machinery. Assuming the original volume and costs, should VJ Walker Industries accept this special order? $($Assume VJ Walker Industries will incur variable selling costs as well as variable manufacturing costs related to this order.$)$