Calculate total relevant cost per unit for each unit

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Question - The following unit cost information pertained to the trumpet division of WGN Music Co. and was based on monthly demand and sales of 100 units:

Variable manufacturing costs:

 

Direct materials

$130

Direct labor

180

Variable factory overhead

70

Fixed factory overhead:

 

Depreciation

50

Rent for equipment

20

Other

20

Total manufacturing cost

$470

Variable selling costs

28

Fixed selling costs

43

Total (full) product cost

$541

Assume that the Trumpet Division was evaluating whether or not it would accept a special order for 10 trumpets at $500 per unit.

Required -

1. Calculate total relevant cost per unit for each unit in the special-sales order.

2. Should WGN accept the special order; why or why not?

Reference no: EM132490962

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