Old Vine Vineyard produces premium wine.Its success in the industry is due to its quality,although all of its customers,wine shops and specialty grocery stores,are very cost conscious and negotiate for price cuts on all large orders.Noting that the wine industry is becoming increasingly competitive,Old Vine is looking for a way to meet the challenge.It is negotiating with Eastern Seasons,a regional specialty grocery store,to purchase a large order of wine.Old Vine is currently producing at under-capacity and would like to keep its production facilities,gaining better economies of scale by increasing production.Eastern Seasons has agreed to a large order but only at a price of $39 per bottle.The special order can be purchased in one batch with available capacity.Old Vine prepared these data: Next month's operating information (per unit,for 10,000 bottles,made in 10 batches of 1,000 each)

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The Answer of Old Vine Vineyard produces premium wine.Its success in the industry is due to its quality,although all of its customers,wine shops and specialty grocery stores,are very cost conscious and negotiate for price cuts on all large orders.Noting that the wine industry is becoming increasingly competitive,Old Vine is looking for a way to meet the challenge.It is negotiating with Eastern Seasons,a regional specialty grocery store,to purchase a large order of wine.Old Vine is currently producing at under-capacity and would like to keep its production facilities,gaining better economies of scale by increasing production.Eastern Seasons has agreed to a large order but only at a price of $39 per bottle.The special order can be purchased in one batch with available capacity.Old Vine prepared these data: Next month's operating information (per unit,for 10,000 bottles,made in 10 batches of 1,000 each)

Old Vine Vineyard Produces Premium Wine