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Home Q & A Board Other Fields Homework Help Business Accounting
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jerico jerico
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Posts: 4603
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9 years ago
Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Zolas' Heaters has excess capacity. The following per unit data apply for sales to regular customers:

   Direct materials   $400
   Direct manufacturing labor   120
   Variable manufacturing support   60
   Fixed manufacturing support   200
   Total manufacturing costs   780
   Markup (20% of total manufacturing costs)   156
   Estimated selling price   $936

If Ms. Leila wanted a long-term commitment, and not a one-time-special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains same?
A) $780
B) $580
C) $520
D) $936
Textbook 
Cost Accounting

Cost Accounting


Edition: 14th
Authors:
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cyborgcyborg
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9 years ago
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jerico Author
wrote...
#2
9 years ago
I can confidently say that it looks and sounds right lol Thank you Slight Smile Give this man a thumbs up.
wrote...
#3
9 years ago
Cool! No problem.
wrote...
#4
9 years ago
Quote from: jerico (9 years ago)
Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Zolas' Heaters has excess capacity. The following per unit data apply for sales to regular customers:

   Direct materials   $400
   Direct manufacturing labor   120
   Variable manufacturing support   60
   Fixed manufacturing support   200
   Total manufacturing costs   780
   Markup (20% of total manufacturing costs)   156
   Estimated selling price   $936

If Ms. Leila wanted a long-term commitment, and not a one-time-special order, for supplying this product, calculate the most likely price to be quoted assuming the markup remains same?
A) $780
B) $580
C) $520
D) $936
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