The following information relates to the manufacturing costs of the product manufactured by Marigold Company: Line Item
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Question:
The following information relates to the manufacturing costs of the product manufactured by Marigold Company:
Line Item Description | Cost |
---|---|
Direct materials | $20 |
Direct labor | 10 |
Variable overhead | 20 |
Fixed overhead | 17 |
Unit manufacturing cost | $67 |
Fixed selling costs are $650,000 per year, and variable selling costs for training customers on how to use the product are $11 per unit sold. Although production capacity is 400,000 units per year, the company expects to produce only 250,000 units next year. The product usually sells for $100 each. A customer has offered to buy 40,000 units for $80 each.
The incremental cost per unit associated with the special order is:
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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