Solution-What is the minimum acceptable bid per unit

What is the minimum acceptable bid per unit

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Question - Grounded Coffee Products manufactures coffee tables. Grounded Coffee Products has a policy of adding a 10% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:

Output units 30,000 tables

Machine-hours 4,000 hours

Direct manufacturing labor-hours 14,000 hours

Direct materials per unit $140

Direct manufacturing labor cost per unit $14

Variable manufacturing overhead costs per unit $18

Fixed manufacturing overhead costs $1,500,000

Product and process design costs $1,400,000

Marketing and distribution costs $1,000,000

Required - Grounded Coffee Products is approached by an overseas customer to fulfill a one-time-only special order for 5000 units. All cost relationships remain the same except for a one-time setup charge of $60,000. No additional design, marketing, or distribution costs will be incurred. What is the minimum acceptable bid per unit on this one-time-only special order?

Reference no: EM133150832

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What is the minimum acceptable bid per unit

Reference no: EM133150832

Reference no: EM133150832

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