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jerico jerico
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Posts: 4603
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9 years ago
Parker and Spitzer Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:

   Direct materials   $1,782
   Direct labor   810
   Variable manufacturing support   1,296
   Fixed manufacturing support   2,808
   Total manufacturing costs   6,696
   Markup (50%)   3,348
   Targeted selling price   $   10,044

Parker and Spitzer Manufacturing has excess capacity.

Required:
a.   What is the full cost of the product per unit if the marketing costs is $3,000?
b.   What is the contribution margin per unit?
c.   Which costs are relevant for making the decision regarding this one-time-only special order? Why?
d.   For Parker and Spitzer Manufacturing, what is the minimum acceptable price of this one-time-only special order?
e.   For this one-time-only special order, should Parker and Spitzer Manufacturing consider a price of $5,400 per unit? Why or why not?
Textbook 
Cost Accounting

Cost Accounting


Edition: 14th
Authors:
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cyborgcyborg
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#1
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9 years ago
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jerico Author
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#2
9 years ago
Very happy to know people like you still exist. Really, without your help, I wouldn't understand the content one bit.
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#3
9 years ago
Cool! No problem.
wrote...
#4
3 years ago
thanks
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