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wizspero wizspero
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Posts: 269
Rep: 0 0
5 years ago
Grounded Coffee Products manufactures coffee tables. Grounded Coffee Products has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:

Output units20,000tables
Machine-hours8,000hours
Direct manufacturing labor-hours10,000hours
Direct materials per unit$105
Direct manufacturing labor per hour$10
Variable manufacturing overhead costs$322,500
Fixed manufacturing overhead costs$1,200,000
Product and process design costs$1,100,000
Marketing and distribution costs$1,125,000

Grounded Coffee Products is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $20,000. No additional design, marketing, or distribution costs will be incurred. What is the minimum acceptable bid per unit on this one-time-only special order?
A) $146.125
B) $1346.125
C) $126.125
D) $946.125
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KapaaKapaa
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#1
Posts: 195
Rep: 32 0
5 years ago
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wizspero Author
wrote...
#2
5 years ago
Commenting just to show my support for informative posts like this, keep it up 10/10
wrote...
#3
5 years ago
That helps more than you thinks, thanks for being so thoughtful
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