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Would accept the order if are the manager

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Reference no: EM132623589

Consider zagol manufacturing which is engaged in the manufacturing of product ABC. To produce one unit of the product the company incurs the following costs:

Direct material ______$5/kg

Direct labor_________$10/hour

Total Manufacturing overhead __________________$30000

Problem 1: The company produces a total of 10000 units per month. And the actual price the product is sold is around $24. Company XYZ offers to buy a total of 5000 units this month at the price of $ 17/unit. Would you accept the order if you are the manager? (assume 20% of the manufacturing overhead is variable cost).

Reference no: EM132623589

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