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jerico jerico
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9 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 units   20,000   tables
   Machine-hours   8,000   hours
   Direct manufacturing labor-hours   10,000   hours
   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
Textbook 
Cost Accounting

Cost Accounting


Edition: 14th
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cyborgcyborg
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9 years ago
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jerico Author
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#2
9 years ago
This solved my problem perfectly, thank you for your kind input.
wrote...
#3
9 years ago
Cool! No problem.
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