FinePrint Company
FinePrint Company
John Johnson hung up the phone and began to contemplate the offer he had just received. Abbie Jenkins, a friend of Johnson’s and the owner of a small company in nearby Keswick, Virginia, had just called to see if Johnson’s printing company, FinePrint Company, could accommodate a special printing order next month.
Company Background
Johnson’s company, FinePrint Company, printed elaborate high-quality color brochures in its facility located in Charlottesville, Virginia. It primarily served other businesses in the central Virginia area, although it did have some clients in southwest Virginia and as far east as the Chesapeake Bay region of the state. Monthly production at its Charlottesville facility was running at around full capacity of 150,000 brochures per month. John Johnson owned and managed the company. He employed one sales representative and one printing press operator, although he frequently relied on temporary labor to help in the printing process as needed to accommodate any changes in printing volume. John felt that many of his costs were fixed, but that some costs varied with the number of brochures he printed and sold. Exhibit 1 contains information related to FinePrint’s monthly operating costs for the company’s current activity level of 150,000 brochures per month.
The company typically priced its printing services at an average of $17 per 100 brochures printed. Historically, Johnson had encountered little variation in pricing from job to job, although occasionally, special situations did arise. He wondered how he should handle those special situations. He didn’t have a “rule of thumb” he could apply, but he wished he could find one.
The Special Order
In her phone call, Abbie Jenkins indicated that she needed a special job printed next month. She needed 25,000brochures related to a new product for distribution at three trade shows she was attending. When John quoted Abbie the usual price of $17 per 100
John Johnson hung up the phone and began to contemplate the offer he had just received. Abbie Jenkins, a friend of Johnson’s and the owner of a small company in nearby Keswick, Virginia, had just called to see if Johnson’s printing company, FinePrint Company, could accommodate a special printing order next month.
Company Background
Johnson’s company, FinePrint Company, printed elaborate high-quality color brochures in its facility located in Charlottesville, Virginia. It primarily served other businesses in the central Virginia area, although it did have some clients in southwest Virginia and as far east as the Chesapeake Bay region of the state. Monthly production at its Charlottesville facility was running at around full capacity of 150,000 brochures per month. John Johnson owned and managed the company. He employed one sales representative and one printing press operator, although he frequently relied on temporary labor to help in the printing process as needed to accommodate any changes in printing volume. John felt that many of his costs were fixed, but that some costs varied with the number of brochures he printed and sold. Exhibit 1 contains information related to FinePrint’s monthly operating costs for the company’s current activity level of 150,000 brochures per month.
The company typically priced its printing services at an average of $17 per 100 brochures printed. Historically, Johnson had encountered little variation in pricing from job to job, although occasionally, special situations did arise. He wondered how he should handle those special situations. He didn’t have a “rule of thumb” he could apply, but he wished he could find one.
The Special Order
In her phone call, Abbie Jenkins indicated that she needed a special job printed next month. She needed 25,000brochures related to a new product for distribution at three trade shows she was attending. When John quoted Abbie the usual price of $17 per 100