Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 24.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.80 Fixed costs per month $ 111,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to pay Poppycrock $22 per crate for a special-order batch of 5,000 crates. The special-order popcorn would include a unique label with information about the Boys and Girls of Canada. The additional cost of the label is estimated at $1.00 per crate. In addition, the variable overhead for these special-order crates would decrease by $0.50 because there would be no distribution costs. a. What is the incremental cost of creating a normal crate of popcorn

$20.30

Explanation:

For computation of incremental cost of creating a normal crate of popcorn first we need to find out the incremental cost for normal crate which is shown below:-

Incremental cost for normal crate = Direct materials + Direct labor + Variable overhead

= $5.50 + $10.50 + $3.80

= $19.80 per crate

Incremental cost for normal crate = Direct materials + Direct labor + Reduced variable overhead + Label cost

= $5.50 + $10.50 + ($3.80 - $0.50) + $1.00

= $5.50 + $10.50 + $3.30 + $1.00

= $20.30

Therefore for computing the Incremental cost for normal crate we simply applied the above formula.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know