Peace Inc. is a very small-scale producer of holiday season paper napkins located in central Texas,...

Transcribed Image Text:

Peace Inc. is a very small-scale producer of holiday season paper napkins located in central Texas, operating primarily around the Holiday season. Peace's entire annual production takes place over a single weekend in early December, during which a maximum of 3,000 paper napkins of varied scents can be produced and packaged into boxes of thirty paper napkins each. For purposes of this problem, assume that all paper napkins have identical costs. Currently, Peace makes 2,400 paper napkins during the weekend. Variable costs consist of materials (32 pounds of material @ $5/pound) and boxes (@ $0.50/box). All other costs, including facilities, overhead, and labor, are considered fixed costs of $180. Peace can sell each box for $4. Ignore taxes throughout the problem. Over the past several years, Peace has received numerous customer requests for specialty boxes containing just one type of paper napkins (her winter lodge scented paper napkins are very popular). Peace is therefore considering offering specialized boxes as a new product line. While the paper napkins themselves would be the same as before, they would be packaged in a smaller box, costing $0.20 each. The smaller box would hold nine paper napkins, and Peace can sell it for $2 per box. Adding the new product line would not affect existing costs, including the fixed costs. A) Assume that the business is only producing regular boxes. What is the breakeven point in the number of regular boxes? Input number rounded off to two decimal points. type your answer... B) Assume that the business completely shifted to producing only specialty boxes and produced as many as possible, what is the profit? Input number without the dollar sign. type your answer... C) Assume that total production is at the maximum capacity and that the business can sell whatever is made. If the business were to produce a mixture of regular and specialty boxes, what is the smallest number of specialty boxes that would need to be produced to break even? Input number rounded off to two decimal points. type your answer... Peace Inc. is a very small-scale producer of holiday season paper napkins located in central Texas, operating primarily around the Holiday season. Peace's entire annual production takes place over a single weekend in early December, during which a maximum of 3,000 paper napkins of varied scents can be produced and packaged into boxes of thirty paper napkins each. For purposes of this problem, assume that all paper napkins have identical costs. Currently, Peace makes 2,400 paper napkins during the weekend. Variable costs consist of materials (32 pounds of material @ $5/pound) and boxes (@ $0.50/box). All other costs, including facilities, overhead, and labor, are considered fixed costs of $180. Peace can sell each box for $4. Ignore taxes throughout the problem. Over the past several years, Peace has received numerous customer requests for specialty boxes containing just one type of paper napkins (her winter lodge scented paper napkins are very popular). Peace is therefore considering offering specialized boxes as a new product line. While the paper napkins themselves would be the same as before, they would be packaged in a smaller box, costing $0.20 each. The smaller box would hold nine paper napkins, and Peace can sell it for $2 per box. Adding the new product line would not affect existing costs, including the fixed costs. A) Assume that the business is only producing regular boxes. What is the breakeven point in the number of regular boxes? Input number rounded off to two decimal points. type your answer... B) Assume that the business completely shifted to producing only specialty boxes and produced as many as possible, what is the profit? Input number without the dollar sign. type your answer... C) Assume that total production is at the maximum capacity and that the business can sell whatever is made. If the business were to produce a mixture of regular and specialty boxes, what is the smallest number of specialty boxes that would need to be produced to break even? Input number rounded off to two decimal points. type your answer...