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Author Question: Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large ... (Read 538 times)

joblessjake

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Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Direct materials$546
Direct labor360
Variable manufacturing support64
Fixed manufacturing support122
Total manufacturing costs1,092
Markup (50%)546
Targeted selling price$1,638

Kitchens Sales inc. has excess capacity. Mr. Cifer wants the cabinets in cherry rather than oak, so direct material costs will increase by $65 per unit. The average marketing cost of Kitchens  Sales product is $175 per order.  Which of the following costs is NOT considered to calculate the minimum acceptable price of a one-time-only special order?
◦ marketing costs
◦ direct material costs
◦ indirect material costs
◦ special design costs


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Marked as best answer by joblessjake on Mar 6, 2021

kingdude89

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