Fullerton Manufacturing makes a single product with the following attributes:

Direct labor is paid $20 per hour and each unit of the product requires 1.5 labor hours. Fixed manufacturing overhead is applied to products at the rate of $10 per direct labor hour. 

Required 

(a) Fullerton Manufacturing has received an offer from a new customer to buy a modified version of the existing product. The modification would require an additional $15 of direct materials cost and an additional 0.20 labor hours. Fullerton Manufacturing has enough idle direct labor capacity to fill this order without disrupting existing production and sales. What is the minimum price that Fullerton Manufacturing should accept per unit for this modified product? 

(b) Assume now that Fullerton Manufacturing is operating at direct labor hour capacity and would need to displace some of its existing product to accept this offer. What is the minimum price that Fullerton Manufacturing should accept per unit for this modified product?  

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Price.... Variable costs PRODUCT PER-UNIT DATA Direct materials... Direct labor.... Contribution margin per unit... Fixed cost...... Gross margin. $130.00 $ 40.00 30.00 $ 60.00 15.00 $ 45.00