Reference no: EM132800692
Question - Loma Company manufactures basketball backboards. The following information pertains to the company's normal operations per month:
Output units 15,000 boards
Machine-hours 4,000 hours
Direct manufacturing labour-hours 5,000 hours
Direct manufacturing labour per hour $12
Direct materials per unit $100
Variable manufacturing overhead costs $150,000
Fixed manufacturing overhead costs $300,000
Product and process design costs 200,000
Marketing and distribution costs $250,000
Required -
a) For long-run pricing, what is the full-cost base per unit?
b) Loma Company is approached by an overseas city to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for an-additional one-time setup charge of $40,000. No additional design, marketing, or distribution costs will be acceptable bid per unit on this one-time-only special order?
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