The panther corporation is working at full prduction capacity producing 12000 units of a unique product everlast.
Direct materials 10
direct manufacturing labor 1
manufacturing overhead 17
total manufacturing cost 28
Manufacturing over head cost per unit is based on variable cost per unit of 8 and fixed costs of 108000 at full capacity of 12000 . Marketing cost per unit , all varaible , is 2 and selling price is 56. A customer , the apex company has asked panther to produce 3500 units of strong last, a modifiaction of everlast. Stronglast would requre the same manufacturing processes as everlast. Apex has offered to pay panter 51 for a unit of stronglast plus half of the marketing cost per unit
What is the opportunity cost to panther of producing the 3500 units of stronglast
Determine the formula for calculating the opporunity cost the calculate the opportunity cost of producing the 3500 units of stronglast
The cheasapeaks corporation has offered to produce 3500 units of everlast for panther so that panther may accept the apex offer . That is if panther accepts the chesapeaks offer, panther would manufacture 8500 units of everlast and 3500 units of strong last and purchase 3500 units of everlast from chesapeaks . Cheasapeaks would charge panther 48 per unit to manufacture everlast
On the basis of financial considerations alone , should panther accept the apex offer?
Panther is considering manufacturing 8500 units of everlast and 3500 units of stronglast and purchasing 3500 units of everlast from chesapeaks. Cheasapeake would charge panther 48 per unit to manufacture everlast . Begin by completing the following table for manufactured stronglast units and purchased everlast units .
Suppose panther had been working at less than full capacity producing 8500 units of everlast at the time the apex offer was made calculate the minimum price panther should accept for stronglast uner these conditions