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Author Question: Grounded Coffee Products manufactures coffee tables. Grounded Coffee Products has a policy of adding ... (Read 496 times)

mckennatimberlake

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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 units20,000tables
Machine-hours6000hours
Direct manufacturing labor-hours14,000hours
Direct materials per unit$140 
Direct manufacturing labor per hour$20 
Variable manufacturing overhead costs$360,000 
Fixed manufacturing overhead costs$1,500,000 
Product and process design costs$1,400,000
Marketing and distribution costs$1,000,000 

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? (Round your final answer to the nearest cent.)
◦ $184.00
◦ $484.00
◦ $172.00
◦ $238.00


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Marked as best answer by mckennatimberlake on Mar 6, 2021

ky860224

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