Question: Problem No 1 ( Special order ) The Modern Packing Corporation ( MPC ) specializes in the manufacture of one - liter plastic bottles. The
Problem No Special order
The Modern Packing Corporation MPC specializes in the manufacture of oneliter
plastic bottles. The plastic molding machines are capable of producing bottles per
hour. The firm estimates that the variable cost of producing a plastic bottle is cents.
The bottles are sold for cents each.
Management has been approached by a local toy company that would like the firm to
produce a molded plastic toy for them. The toy company is willing to pay $ per unit for
the toy. The unit variable cost to manufacture the toy will be $ In addition, MPC
would have to incur a cost of $ to construct the mold required exclusively for this
order. Because the toy uses more plastic and is of a more intricate shape than a bottle, a
molding machine can produce only units per hour. The customer wants
units. Assume that MPC has a total capacity of machinehours available during
the period in which the toy company wants delivery of the toys. The firm's fixed costs,
excluding the costs to construct the toy mold, during the same period will be $
Required:
Suppose the demand for its bottles is units, and the special toy order has to
be either taken in full or rejected totally. Should MPC accept the special toy order?
Explain your answer.
Suppose the demand for its bottles is units, and the special toy order has to
be either taken in full or rejected totally. Should MPC accept the special toy order?
Explain your answer.
Suppose the demand for its bottles is units, and MPC can accept any quantity
of the special toy order. How many bottles and toys should it manufacture?
could you help me in answer this qustion if it possible to answer it like table incloud accept and rejected coloum
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