Reference no: EM132591156
Swan Manufacturing is approached by a 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? $1,825
?Direct labor? 900
?Variable manufacturing support? 1,300
?Fixed manufacturing support? 3,000
?Total manufacturing costs ?$7,025.00
?Markup (50%)? 3,512.50
?Targeted selling price ?$ 10,537.50
Swan Manufacturing has excess capacity.
Required:
Question a.? What is the full cost of the product per unit if the marketing costs is $3,000?
Question b. ?What is the contribution margin per unit?
Question c. ?Which costs are relevant for making the decision regarding this one-time-only special order? Why?
Question d.? For Swan Manufacturing, what is the minimum acceptable price of this one-time-only special order?
Question e. ?For this one-time-only special order, should Parker and Spitzer Manufacturing consider a price of $5,400 per unit? Why or why not?
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