Structure Furniture, manufactures coffee tables. Structure Furniture has a policy of adding a 20%markup to full costs and currently has excess capacity. The following information pertains to thecompany's normal operations per month:Output unitsMachine-hours30,000tables8,000hoursDirect manufacturing labour-hours10,000hoursDirect materials per unitDirect manufacturing labour per hourVariable manufacturing overhead costsFixed manufacturing overhead costsProduct and process design costsMarketing and distribution costsS100S12$322,500$1,200,000$900,000$1,125,000a) Structure Furniture is approached by an overseas customer to fulfill a one-time-onlyspecial order for 1,000 units. All cost relationships remain the same except for a one-timesetup charge of $20,000. No additional design, marketing, or distribution costs will beincurred. What is the minimum acceptable bid per unit on this one-time-only specialorder?b) What is the Structure Furniture full product cost for long-run pricing purposes?

Output units 30000 tables Machine hours 8000 hours Direct manufacturing labors-hours 10000 hours…

Answered: Structure Furniture, manufactures…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter4: Linear Programming Models

Section4.8: Data Envelopment Analysis (dea)

Problem 42P

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