Reference no: EM132634487
A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly.
The cost per unit information apply for deals to regular clients:
?Direct materials?$1,982
?Direct labor?810
?Variable manufacturing overhead?1,296
?Fixed manufacturing overhead?2,808
?Total manufacturing costs?6,896
?Markup (50%)?3,348
?Targeted selling price?$ 10,244
Incredible Fabricating and Manufacturing has ample idle capacity.
Required: ?
Question 1: What is the full cost of the product per unit if the marketing costs is $2,000?
Question 2: What is the contribution margin per unit?
Question 3: Which costs are relevant for making the decision regarding this one-time-only special order? Why?
Question 4: ?For Incredible Fabricating and Manufacturing, what is the minimum acceptable price of this one-time-only special order?
Question 5: For this one-time-only special order, should Incredible Fabricating and Manufacturing consider a price of $5,400 per unit? Why or why not?
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