Direct material $50 Direct labor 20 Overhead (20% variable) 10 Other information: Sales price 100 SG&A costs (40% variable) 15
Direct material $50 Direct labor 20 Overhead (20% variable) 10 Other information: Sales price 100 SG&A costs (40% variable) 15
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 9E: Computador has a manufacturing plant in Des Moines that has the theoretical capability to produce...
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Northern Digital Inc.
The Northern Digital Inc. produces a high-quality computer chip. Unit production costs (based on capacity production of 100,000 units per year) follow:
Direct material | $50 |
Direct labor | 20 |
Overhead (20% variable) | 10 |
Other information: | |
Sales price | 100 |
SG&A costs (40% variable) | 15 |
Refer to Northern Digital, Inc. Assume, for this question only, that the Memory Division is operating at a level of 70,000 chips per year. What is the minimum price that the division would consider on a "special order" of 1,000 chips to be distributed through normal channels?
Select one:
a. $95
b. $100
c. $81
d. $78
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