What is the lowest price time to live should accept

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Reference no: EM132929414

Problem - Time to Live By makes custom made sundials. Two months ago, the Thane of Sapphire Fief ordered a sundial to commemorate the birth of her 10th child. The sundial, as ordered, was made of a rare granite mined near Banff. Huge sapphires shaped like fanciful griffins adorned the rim and the numerals are made of diamonds and rubies. The center was made of purest gold. Due to some political unrest, the Thane and her family are now in hiding. It is not expected that she will ever be able to take possession of (or pay for) the sundial. The cost of the sundial was:

DM $200,000

DL 30,000

VOH 5,000

FOH 15,000

Overhead is applied on the basis of direct labour hours.

Time to Live By has estimated that only 25% of the value of the gems and other material from the sundial can be recovered, since they were cut into such unusual shapes.

The firm plans to offer the sundial at an auction next week. The cost to transport the sundial to the auction is $150. The auction house takes a 2% cut of the selling price.

What is the lowest price Time to Live should accept for the sundial?

Reference no: EM132929414

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