Jeremys desks has excess capacity mr hood wants the desks

Reference no: EM13598625

Jeremy's Desks is approached by Mr. Harry Hood, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Direct materials
$455

Direct labor

300

Variable manufacturing support
45
Fixed manufacturing support

100
Total manufacturing costs

900
Markup (60%)

540
Targeted selling price

$1440

Jeremy's Desks has excess capacity. Mr. Hood wants the desks in bamboo rather than maple, so direct material costs will increase by $30 per unit.

For Jeremy's Desks, what is the minimum acceptable price of this one-time-only special order?

Reference no: EM13598625

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