PT. Sultan Food sells food and variety snacks and cake. The company has one restaurant location and
Question:
PT. Sultan Food sells food and variety snacks and cake. The company has one restaurant location and serves catering orders for offices. So far, all dishes are made by themselves using family recipes that have been passed down from generation to generation. The company already has regular customers from various companies for ordering snacks and cakes for office events. Recently the company received an offer from PT. Great taste for making variety snacks and the usual cakes made by the company. Average cost per unit to produce snacks and cakes as much as 10,000 units per month are as follows:
- Raw Material Cost : IDR 5,000
- Labor costs Cost : IDR 4,000
- Overhead Variable Cost : IDR 1,500
- Overhead Fixed (assuming a capacity of 10,000 units) : Rp3,700
In the fixed overhead costs, there is a production manager's salary of Rp 12,500,000 per month which consists of a basic salary of Rp. 10,000,000 and job allowances of Rp. 2,500,000. In addition, there is an equipment depreciation expense of IDR 500,000 per month.
If the company accepts the offer of PT. Great taste, so the company can focus on developing a new menu in the form of healthy food and diet. Based on the analysis that has been done, the new menu can provide a contribution margin of Rp 15,000 per serving and the company has the prospect of receiving 1,000 portions per month. Equipment commonly used to make snacks and the cake has a current book value of Rp.28,000,000, and as it is no longer being used will be sold. Currently there are those who want to buy the equipment at a price of Rp 25,000,000. The production manager will be reassigned to another department, and will no longer receive job benefits. PT. Great Taste agreed to buy 10,000 units snacks and cakes per month as needed.
Requested:
1. Make your analysis to recommend whether PT. The Steady taste should be accepted or not?
2. What is the maximum price that can be offered to PT. Feeling good when negotiating?
3. What strategic factors need to be considered in the decision?
Expert Answer:
1 Should PT Great Taste offer be accepted Firstly calculate the total cost per unit for producing snacks and cakes Total Cost per Unit Raw Material Co... View the full answer
