Question

to this decision. The differential revenue is m ore accepting this additional business will result in a net than the differential cost. Thus, c. What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places. 11. EX.24-14.ALGO (Algorithmic) Accepting Business at a Special Price Power Serve Company expects to operate at 90% of productive capacity during July. The total manufacturing costs for July for the production of 36,000 batteries are budgeted as follows: Direct materials $504,300 Direct labor 185,400 Variable factory overhead 51,900 Fixed factory overhead 104,000 Total manufacturing costs $845,600 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit 12. EX.24-16.ALGO (Algorithmic) Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows: Direct materials $15,900 Direct labor 8,000 Factory overhead 5,600 Total manufacturing cost $29,500 The selling and administrative expenses are $27,100. The management desires a profit equal to 169 mvested assets of $503,000.

Answer 1

Solution 11
	Total units	Cost per unit
	36000	Total cost/Units
Direct Material	$ 504,300.00	$   14.01
Direct labor	$ 185,400.00	$      5.15
Variable factory overhead	$    51,900.00	$      1.44
Total	$ 741,600.00	$   20.60
So the order can not be placed at cost less than $ 20.60
Solution 12
	Total units
	1180
Direct Material	$    15,900.00
Direct labor	$      8,000.00
Factory overhead	$      5,600.00
Selling and administrative expense	$    27,100.00
Desired profit (503000*16%)	$    80,480.00
Total selling price	$ 137,080.00
Selling price per unit	137080/1180
Selling price per unit	$         116.17