Lipto Biometic has been approached by an Australian customer to accept a one-time- only special order...
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Lipto Biometic has been approached by an Australian customer to accept a one-time- only special order for a product. The following per unit data apply for sales to regular customers: Direct materials Direct labour Variable manufacturing costs Fixed manufacturing costs Total manufacturing costs Markup (50%) Targeted selling price Assume that Lipto Biomedic has excess capacity. $55 24 42 97 $218 109 $327 Required: a. What is the full cost of the product per unit? b. What is the contribution margin per unit? c. Which costs are relevant for making the decision regarding this one-time-only special order? Why? d. For Lipto Biometics, what is the minimum acceptable price of this one-time-only special order? e. For this one-time-only special order, should Lipto Biometics consider a price of $175 per unit? Why or why not? Lipto Biometic has been approached by an Australian customer to accept a one-time- only special order for a product. The following per unit data apply for sales to regular customers: Direct materials Direct labour Variable manufacturing costs Fixed manufacturing costs Total manufacturing costs Markup (50%) Targeted selling price Assume that Lipto Biomedic has excess capacity. $55 24 42 97 $218 109 $327 Required: a. What is the full cost of the product per unit? b. What is the contribution margin per unit? c. Which costs are relevant for making the decision regarding this one-time-only special order? Why? d. For Lipto Biometics, what is the minimum acceptable price of this one-time-only special order? e. For this one-time-only special order, should Lipto Biometics consider a price of $175 per unit? Why or why not?
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a Full cost of the product per unit The full cost per unit includes all the direct and indirect costs associated with manufacturing the product It can ... View the full answer
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