Required information [The following information applies to the questions displayed below.] These questions relate to the...
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Required information [The following information applies to the questions displayed below.] These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Customer Meals Sold Total Customer Servings Bene Petit First Year Operating Data: Single (1 serving) Dual (2 servings) Family (4) Total servings) 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 3,000 1,250 3,000 5,000 5,000 12,000 20,000 10 24 40 Customer Orders (Average 4 meals per order) Number of Donated Meals (1 per customer meal) Number of Donated Deliveries (500 meals per delivery) Additional information about selling prices, variable costs, and fixed costs is summarized below. . The average sales price for customer meals is $5 per serving. The average direct materials (ingredients) cost of customer meals is $1 per serving. Direct labor costs average $0.75 per customer meal. Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. . The delivery expense for customer meals is $2 per customer order. The incremental cost of producing the donated meals is $1.25 per meal. The delivery expense for donated meals is $125 per delivery to community partners. The following fixed costs are allocated to customer meals based on total sales revenue: Fixed manufacturing overhead costs are $75,000 per year. Fixed selling expenses are $29,000 per year. o Fixed administrative expenses are $40,000 per year. The attached excel file shows a contribution margin income statement based on these starting assumptions. You should return to this starting spreadsheet for each part of the case below. Part 3 CVP Analysis (starting data).xlsx 10. Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-size. Single-serve meals make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor is trying to decide whether to eliminate single- serve meal kits but is unsure how it would affect profit and the number of meals donated to homeless families. The following additional details are available: The price of a single-serve meal is $5. Variable manufacturing costs for customer meals are $2.20 per single-serve meal, $3.20 per dual-serve meals, and $5.20 per family-size meal. Variable manufacturing costs are $1.25 per donated meal. Variable delivery expenses for customer meals are $2 per order and the average order size is 4 meals per order. . Delivery expenses for donated meals are $125 for every 500 meals delivered, or about $0.25 per donated meal. About $500 in monthly advertising expenses could be saved if the single-serve product was eliminated. Taylor believes that about 25% of single-serve customers would switch to dual-serve meals but would reduce their order size from 4 meals per week to 2 meals per week. a. How much contribution margin will be lost on the 3,000 single-serving meals that are eliminated? (Ignore the increase in dual-serve meals for this question.) Answer is complete and correct. Contribution margin lost $ 2,400 b. How much contribution margin will be gained from the single-serving customers who switch to dual-serve meals? Answer is complete but not entirely correct. Contribution margin gained $ 750 b. How much contribution margin will be gained from the single-serving customers who switch to dual-serve meals? Answer is complete but not entirely correct. Contribution margin gained $ 750X c. How much total fixed cost will be saved per year? Answer is complete but not entirely correct. Fixed cost saved $144,000 d. How would dropping the single-serve product line affect profit overall (combining parts a-c above)? Answer is complete but not entirely correct. Effect on profit $ (145,650) increase in profit Required information [The following information applies to the questions displayed below.] These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Customer Meals Sold Total Customer Servings Bene Petit First Year Operating Data: Single (1 serving) Dual (2 servings) Family (4) Total servings) 3,000 5,000 12,000 20,000 3,000 10,000 48,000 61,000 750 3,000 1,250 3,000 5,000 5,000 12,000 20,000 10 24 40 Customer Orders (Average 4 meals per order) Number of Donated Meals (1 per customer meal) Number of Donated Deliveries (500 meals per delivery) Additional information about selling prices, variable costs, and fixed costs is summarized below. . The average sales price for customer meals is $5 per serving. The average direct materials (ingredients) cost of customer meals is $1 per serving. Direct labor costs average $0.75 per customer meal. Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. . The delivery expense for customer meals is $2 per customer order. The incremental cost of producing the donated meals is $1.25 per meal. The delivery expense for donated meals is $125 per delivery to community partners. The following fixed costs are allocated to customer meals based on total sales revenue: Fixed manufacturing overhead costs are $75,000 per year. Fixed selling expenses are $29,000 per year. o Fixed administrative expenses are $40,000 per year. The attached excel file shows a contribution margin income statement based on these starting assumptions. You should return to this starting spreadsheet for each part of the case below. Part 3 CVP Analysis (starting data).xlsx 10. Bene Petit currently offers three meal sizes: single-serve, dual-serve, and family-size. Single-serve meals make up about 5% of total sales revenue and have the lowest contribution margin of the three products. Taylor is trying to decide whether to eliminate single- serve meal kits but is unsure how it would affect profit and the number of meals donated to homeless families. The following additional details are available: The price of a single-serve meal is $5. Variable manufacturing costs for customer meals are $2.20 per single-serve meal, $3.20 per dual-serve meals, and $5.20 per family-size meal. Variable manufacturing costs are $1.25 per donated meal. Variable delivery expenses for customer meals are $2 per order and the average order size is 4 meals per order. . Delivery expenses for donated meals are $125 for every 500 meals delivered, or about $0.25 per donated meal. About $500 in monthly advertising expenses could be saved if the single-serve product was eliminated. Taylor believes that about 25% of single-serve customers would switch to dual-serve meals but would reduce their order size from 4 meals per week to 2 meals per week. a. How much contribution margin will be lost on the 3,000 single-serving meals that are eliminated? (Ignore the increase in dual-serve meals for this question.) Answer is complete and correct. Contribution margin lost $ 2,400 b. How much contribution margin will be gained from the single-serving customers who switch to dual-serve meals? Answer is complete but not entirely correct. Contribution margin gained $ 750 b. How much contribution margin will be gained from the single-serving customers who switch to dual-serve meals? Answer is complete but not entirely correct. Contribution margin gained $ 750X c. How much total fixed cost will be saved per year? Answer is complete but not entirely correct. Fixed cost saved $144,000 d. How would dropping the single-serve product line affect profit overall (combining parts a-c above)? Answer is complete but not entirely correct. Effect on profit $ (145,650) increase in profit
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