1 / 2 EDUCATION QUESTION 8 - Relevant costing and decision making (10 marks) PART A (8 Marks) Copy Manufacturers Ltd is approached by a European customer to fulfil a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $120 Direct labour Manufacturing costs Marketing costs Fixed costs: Manufacturing costs Marketing costs 60 105 45 135 45 The targeted selling price for regular customers is calculated by applying a mark-up of 50%. (Note: Marketing costs for the special order will be the same as regular sales), Required: a) What is the full cost of the product per unit? 12 Marks) b) What is the contribution margin per unit? (2 Marks) c) If Copy Manufacturers Ltd decides to accept the special order, what is the minimum acceptable price per unit for this special order? (2 Marks) d) What is the change in operating profits if the one-time-only special order for 1,000 units is accepted for $540 a unit by Copy Manufactures Ltd? (2 Marks)