Action Mopeds manufactures mopeds. The following information pertains to the company's normal operations per month:

Output units	15,000 mopeds
Machine−hours	4,000 hours
Direct manufacturing labor hours	5,000 hours
Direct manufacturing labor per hour	$24
Direct materials per unit	$200
Variable manufacturing overhead costs	$322,500
Fixed costs:
Fixed manufacturing overhead costs	$1,200,000
Marketing and distribution costs	$1,125,000
Research and development costs	$900,000

1.What is the unit cost when establishing a long−run price for mopeds?

A. $325.48

B. $309.50

C. $484.50

D. $470.00

E. $444.50

2.What is the unit cost for establishing a minimum bid on a one−time−only special order of 1,000 mopeds from an overseas city if all cost relationships remain the same except for a one−time setup charge of $40,000?

A. $344.50

B. $285.50

C. $360.50

D. $269.50

E. $309.50

Answer rating: 100% (QA)

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