Q.1A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients: Direct materials $1,982 Direct labor 810 Variable manufacturing overhead 1.296 Fixed manufacturing overhead 2.808 Total manufacturing costs 6,896 Markup (50%) 3,348 Targeted selling price $10.244 Incredible Fabricating and Manufacturing has ample idle capacity. Required: a. What is the full cost of the product per unit if the marketing costs is $2,000? 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 Incredible Fabricating and Manufacturing, what is the minimum acceptable price of this one-time-only special order? e. For this one-time-only special order, should Incredible Fabricating and Manufacturing consider a price of 55,400 per unit? Why or why not?

Q.1A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients: Direct materials $1,982 Direct labor 810 Variable manufacturing overhead 1.296 Fixed manufacturing overhead 2.808 Total manufacturing costs 6,896 Markup (50%) 3,348 Targeted selling price $10.244 Incredible Fabricating and Manufacturing has ample idle capacity. Required: a. What is the full cost of the product per unit if the marketing costs is $2,000? 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 Incredible Fabricating and Manufacturing, what is the minimum acceptable price of this one-time-only special order? e. For this one-time-only special order, should Incredible Fabricating and Manufacturing consider a price of 55,400 per unit? Why or why not?

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 2ADM

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Q.1 (b) A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients: Direct materials $1,982 Direct labor 810 Variable manufacturing overhead 1,296 Fixed manufacturing overhead 2,808 Total manufacturing costs 6,896 Markup (50%) 3,348 Targeted selling price $ 10,244 Incredible Fabricating and Manufacturing has ample idle capacity. Required: What is the full cost of the product per unit if the marketing costs is $2,000? What is the contribution margin per unit? Which costs are relevant for making the…
Q.1(b) A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients: Direct materials $1,982 Direct labor 810 Variable manufacturing overhead 1.296 Fixed manufacturing overhead 2.808 Total manufacturing costs 6,896 Markup (50%) 3,348 Targeted selling price $10.244 Incredible Fabricating and Manufacturing has ample idle capacity. Required: a. What is the full cost of the product per unit if the marketing costs is $2,000? 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 Incredible Fabricating and Manufacturing, what is the minimum acceptable price of this one-time-only special order? e. For this one-time-only special order, should Incredible Fabricating and Manufacturing consider a price of…
Q.1 (a) Compare / contrast. Why are these two different? Inventoriable costs and period costs. Direct costs and indirect costs. Manufacturing costs and non-manufacturing costs. Period costs and product costs. Operating costs and non-operating costs. Q.1 (b) A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients: Direct materials $1,982 Direct labor 810 Variable manufacturing overhead 1,296 Fixed manufacturing overhead 2,808 Total manufacturing costs 6,896 Markup (50%)…
A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients:             Direct materials                           $1,982             Direct labor                                      810             Variable manufacturing overhead 1,296             Fixed manufacturing overhead     2,808                   Total manufacturing costs       6,896             Markup (50%)                               3,348             Targeted selling price             $   10,244 Incredible Fabricating and Manufacturing has ample idle capacity. Required:                                                                                           (05 marks) What is the full cost of the product per unit if the marketing costs is $2,000? What is the contribution margin per unit? Which costs are relevant for making…
A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients:             Direct materials                           $1,982             Direct labor                                      810             Variable manufacturing overhead 1,296             Fixed manufacturing overhead     2,808                   Total manufacturing costs       6,896             Markup (50%)                               3,348             Targeted selling price            $   10,244 Incredible Fabricating and Manufacturing has ample idle capacity. Required:    What is the full cost of the product per unit if the marketing costs is $2,000? What is the contribution margin per unit? Which costs are relevant for making the decision…
A client approached to Incredible Fabricating and Manufacturing for a one-time special order for Steel doors. These Steel doors are fabricated and manufactured to local clients regularly. The cost per unit information apply for deals to regular clients:             Direct materials                           $1,982             Direct labor                                      810             Variable manufacturing overhead 1,296             Fixed manufacturing overhead     2,808                   Total manufacturing costs       6,896             Markup (50%)                               3,348             Targeted selling price             $   10,244 Incredible Fabricating and Manufacturing has ample idle capacity. What is the full cost of the product per unit if the marketing costs is $2,000? What is the contribution margin per unit? Which costs are relevant for making the decision regarding this one-time-only special order? Why? For Incredible Fabricating and Manufacturing, what…
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