Question: A camper van converter is preparing a quote for a special order for a friend. The required base commercial van will cost 56,000. The conversion
A camper van converter is preparing a quote for a special order for a friend. The
required base commercial van will cost 56,000. The conversion materials, all of
which are used regularly, are currently carried in stock at their original purchase
price of 6,000. One third of these materials have fallen in price by 10% since their
original purchase. A further third are in short supply and allocating them to this
special order will mean another order (which will generate a contribution margin
2,300) cannot be met. Fixed overheads are applied to jobs by adding 15% to the
base commercial van cost. What is the minimum amount the converter could quote
for this special order without reducing profits?
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