Reference no: EM132478996

Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:

Output units                                         10000 Phones

Machine-hours                                        8,000 Hours

Direct manufacturing labor-hours               5,000 hours

Direct materials per unit                                 $25

Direct manufacturing lavor per hour                  $15

Variable manufacturing overhead cost            $175,000

Fixed manufacturing overhead costs              $425,000

Product and process design costs                  $400,000

Marketing and distribution costs                      $475,000

Point 1: Digital Amplification 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 $15,000. No additional design, marketing, or distribution costs will be incurred.

Required

Question 1: What is the minimum acceptable bid per unit on this one-time-only special order?

Question 2: What is the full product cost?