60.1K

Verified Solution

Link Copied!

1. Read Item 2. Properties, and review the utilization table on PDF page 28. The table indicates COKE has significant excess capacity at its plants. Assume that COKE receives a special order for the Memphis, TN plant, and the price is below the normal selling price. The special order will provide a positive gross margin, also assume that all fixed costs are shared and no additional direct fixed costs are added by accepting the special order. Will COKE accept the special order (yes or no). Why, or why not.
2. 2. Read Item 2. Properties, and review the utilization table on PDF page 28. The table indicates COKE has significant excess capacity at its plants. Assume that COKE receives a special order for the Portland, Indiana plant, and the price is below the normal selling price. The special order will provide a positive gross margin, also assume that all fixed costs are shared and no additional direct fixed costs are added by accepting the special order. Will COKE accept the special order (yes or no). Why, or why not.

As of January 26,2020, the principal properties of the Company included its corporate headquarters, subsidiary headquarters, 71 distribution centers and 12 manufacturing plants. The Company owns 53 distribution centers and 10 manufacturing plants, and leases its corporate headquarters, subsidiary headquarters, 18 distribution centers and two manufacturing plants. Following is a summary of the Company's manufacturing plants and certain other properties: (1) Includes two adjacent buildings totaling approximately 172,000 square feet. (2) Includes a 542,000-square foot manufacturing plant and adjacent 105,000-square foot distribution center. (3) The leases for these facilities are with a related party. The Company believes all of its facilities are in good condition and are adequate for the Company's operations as presently conducted. The Company has production capacity to meet its current operational requirements. The estimated utilization percentage of the Company's manufacturing plants, which fluctuates with the seasonality of the business, as of December 29, 2019, is indicated below: (1) Estimated production divided by capacity, based on operations of six days per week and 20 hours per day. In addition to the facilities noted above, the Company utilizes a portion of the production capacity at SAC, a manufacturing cooperative located in Bishopville, South Carolina, that owns a 261,000-square foot manufacturing plant. The Company's products are generally transported to distribution centers for storage pending sale. There were no changes to the number of distribution centers by market area between December 29, 2019 and January 26, 2020. As of January 26, 2020, the Company owned and operated approximately 4,400 vehicles in the sale and distribution of the Company's beverage products, of which approximately 2,900 were route delivery trucks. In addition, the Company owned approximately 480,000 beverage dispensing and vending machines for the sale of beverage products in the Company's territories as of January 26, 2020

Answer & Explanation Solved by verified expert

See Answer