What is the full cost of the product per unit

Assignment Help Financial Accounting

Reference no: EM131251357

Parker and Spitzer Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:

Direct materials $1,782

Direct labor 810

Variable manufacturing support 1,296

Fixed manufacturing support 2,808

Total manufacturing costs 6,696

Markup (50%) 3,348

Targeted selling price $ 10,044

Barker and Spitzer Manufacturing has excess capacity.

Required:

a. What is the full cost of the product per unit if the marketing costs is $3,000?

b. What is the contribution margin per unit?

c. Which costs are relevant for making the decision regarding this one-time-only special order? Why?

d. For Barker and Spitzer Manufacturing, what is the minimum acceptable price of this one-time-only special order?

e. For this one-time-only special order, should Barker and Spitzer Manufacturing consider a price of $5,400 per unit? Why or why not?

Reference no: EM131251357

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