Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30%...

 

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Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30% markup to full costs and currently has excess capacity. The following information pertains to the company s normal operations per month: 10,000 phones 8,000 hours Direct manufacturing labor-hours 5,000 hours Output units Machine-hours Direct materials per unit Direct manufacturing labor per hour Variable manufacturing overhead costs $25 $15 $175,000 Fixed manufacturing overhead costs Product and process design costs Marketing and distribution costs $425,000 $400,000 $475,000 Digital Amplification is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $15,000. No additional design, marketing, or distribution costs will be incurred. Required a. What is the minimum acceptable bid per unit on this one-time-only special order? b. What is the full product cost? Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30% markup to full costs and currently has excess capacity. The following information pertains to the company s normal operations per month: 10,000 phones 8,000 hours Direct manufacturing labor-hours 5,000 hours Output units Machine-hours Direct materials per unit Direct manufacturing labor per hour Variable manufacturing overhead costs $25 $15 $175,000 Fixed manufacturing overhead costs Product and process design costs Marketing and distribution costs $425,000 $400,000 $475,000 Digital Amplification is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $15,000. No additional design, marketing, or distribution costs will be incurred. Required a. What is the minimum acceptable bid per unit on this one-time-only special order? b. What is the full product cost?

Answer rating: 100% (QA)

a Calculation of cost per unit special order Ddirect material ... View the full answer