MBA-FPX-5010
Capella University
MBA-FPX-5010
Product Pricing Recommendation
Introduction
Acme Pickle Company has distributed pickles under the “Florida’s Best” brand for eight
years from the production facility in Jacksonville, Florida. The organization is a very well-known
organization, it even sells pickles to store in the southeastern part of the United States. The
company is very successful and normally produces anywhere in between 8,000 and 10,000 cases
a month, but has a capacity to produce 12,000 cases without adding equipment and or personnel.
The organization is so successful, that a supermarket in Wisconsin, called Super Deals wants to
get in on the approach to buy some of the goods. The owner is very impressed with the quality of
“Florida’s Best” pickles. The owner asks the account manager about selling some of the goods
for $9.50 a case. The slogan that the owner wishes to use is “Free jar of Florida’s Best pickles
with every purchase of forty dollars or more-this month only!” In this paper I will be discussing
production cost, benefit of recalculating the pickle production, benefits of recalculating cost, and
financial and managerial accounting.
Production Costs
Production costs are classified as fixed and variable. The two primary categories of
expenditures incurred by a corporation while manufacturing goods and services fixed costs stay
constant regardless of how much a firm produces, whereas variable costs change with the
quantity of output generated. The expenses of a company's variable costs are those that are linked
to the amount of goods or services it produces. Variable expenses rise and fall in tandem with a
company's output. Variable expenses will rise as manufacturing volume increases. The variable
Capella University
MBA-FPX-5010
Product Pricing Recommendation
Introduction
Acme Pickle Company has distributed pickles under the “Florida’s Best” brand for eight
years from the production facility in Jacksonville, Florida. The organization is a very well-known
organization, it even sells pickles to store in the southeastern part of the United States. The
company is very successful and normally produces anywhere in between 8,000 and 10,000 cases
a month, but has a capacity to produce 12,000 cases without adding equipment and or personnel.
The organization is so successful, that a supermarket in Wisconsin, called Super Deals wants to
get in on the approach to buy some of the goods. The owner is very impressed with the quality of
“Florida’s Best” pickles. The owner asks the account manager about selling some of the goods
for $9.50 a case. The slogan that the owner wishes to use is “Free jar of Florida’s Best pickles
with every purchase of forty dollars or more-this month only!” In this paper I will be discussing
production cost, benefit of recalculating the pickle production, benefits of recalculating cost, and
financial and managerial accounting.
Production Costs
Production costs are classified as fixed and variable. The two primary categories of
expenditures incurred by a corporation while manufacturing goods and services fixed costs stay
constant regardless of how much a firm produces, whereas variable costs change with the
quantity of output generated. The expenses of a company's variable costs are those that are linked
to the amount of goods or services it produces. Variable expenses rise and fall in tandem with a
company's output. Variable expenses will rise as manufacturing volume increases. The variable
