Bakers bagels llc produces and sells 20 types of bagels by

Reference no: EM13591888

Bakers Bagels LLC produces and sells 20 types of bagels by the dozen. Bagels are priced at $6.00 per dozen (or $0.50 each) and cost $.020 per unit to produce. The company is considering processing the bagels further into two products.: bagels with cream cheese and bagel sandwiches. It would cost an additional $0.50 per unit to produce bagels with cream cheese, and the new selling price would be $2.50 each. It would cost an additional $1.00 per sandwich to produce bagel sandwiches, and the new selling price would be $3.50 each.

1. Identify the relevant per-unit costs and revenues for the alternatives. Are there any sunk costs?

2. Based on the information in requirement 1, should Bakers Bagels expand its product offerings?

3. Suppose that Bakers Bagels did expand its product line to include bagels with cream cheese and bagel sandwiches. Based on customer feedback, the company determined that it could further process those two products into bagels with cream cheese and fruit and bagel sandwiches with cheese. The company's accountant compiled the following information:

Sales.revenue.if.sold.w/o.further.processing &Sales.Rev.if.Processed &Further Processing Costs

Bagels with cream cheese [$2.50 ][$3.50][ Fruit : $1.00]

Bagel sandwiches [3.50][ 4.50 ][Cheese: $0.50]

Perform an incremental analysis to determine if Bakers Bagels should process its products further. Explain your findings.

Reference no: EM13591888

Questions Cloud

If fixed costs are 259238 the unit selling price is 112 and : if fixed costs are 259238 the unit selling price is 112 and the unit variable costs are 63 what is the break-even sales

What is the process for drawing them is there a procedure : what is the process for drawing them? is there a procedure to follow to be able to draw the lewis structure of any

Tally amp co incurred a pretax operating loss of 100000 in : tally amp co. incurred a pretax operating loss of 100000 in its first year of operations for both financial reporting

When forming a company the options are sole proprietor : when forming a company the options are sole proprietor partnership and corporation. most choose corporation. why is the

Bakers bagels llc produces and sells 20 types of bagels by : bakers bagels llc produces and sells 20 types of bagels by the dozen. bagels are priced at 6.00 per dozen or 0.50 each

On october 15 2011 john purchased and placed in service a : on october 15 2011 john purchased and placed in service a used car. the purchase price was 25000. this was the only

Mike saxon is negotiating the purchase of a business the : mike saxon is negotiating the purchase of a business. the final purchase price has been agreed upon but the allocation

On april 3 2011 terry purchased and placed in service a : on april 3 2011 terry purchased and placed in service a building. the building cost 2 million. an appraisal

O november 4 2009 blue company acquired an asset 275-year : on november 4 2009 blue company acquired an asset 27.5-year residential real property for 200000 for use in its

User Account

All Pages