The GREEDY YODA Company has 3 divisions: Endor, Tatooine, and Hoth, information about the 3 divisions are as follows:
Endor: Capacity 40,000 units currently making and selling 28000 units at $400 each; cost of production $190 per unit
Tatooine: capacity 50,000 units currently making and selling 42,000 at $420 each, cost of production $250 per unit
Hoth: capacity 30,000 units currently making and selling 25,000 units at $450 each, cost of production $275 each.
Part 1: a) Determine the income of each division and the total profit for GREEDY YODA
b) GREEDY YODA has decided to award a $50,000 bonus. As his chief accountant you have been assigned to distribute the bonuses. How much does each division get? DEFEND YOUR ANSWER
At the beginning of the next year, Hoth got a new customer; HOTH-LIGHT-SABERS-R-US, who wants to purchase 12,000 units at $390 each. It will cost $90 to ship an item from Endor, $10 to ship from Tatooine and of course nothing to ship from Hoth.
Part 2: a) do you accept the order from HOTH-LIGHT-SABERS-R-US? Remember, your owner is ‘GREEDY YODA'.
b) if you accept the order, where do you produce the 12,000 units to be provided to HOTH-LIGHT-SABERS-R-US?
c) determine the income of each division and the new total profit to GREEDY YODA
d) GREEDY YODA is so excited about getting this new customer that he has decided to distribute $65000 in bonuses in this second year. (note: sales and production costs didn't change for any of the other customers of Endor, Hoth or Tatooine) How do you distribute bonuses this year?
DEFEND YOUR ANSWSER AND REMEMBER HOW YOU DISTRIBUTED BONUSES LAST YEAR.