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10 Alton Inc. is working at full production capacity producing 28,000 units of a unique product. Manufacturing costs per unit for the product are as
10 Alton Inc. is working at full production capacity producing 28,000 units of a unique product. Manufacturing costs per unit for the product are as follows: Direct materials 9 10 Direct labor Manufacturing overhead Total manufacturing cost per unit points 10 $27 The per-unit manufacturing overhead cost is based on a $4 variable cost per unit and $168,0000 fixed costs. The nonmanufacturing costs, all variable, are $10 per unit, and the sales price is $42 per unit. ook Sports Headquarters Company (SHC) has asked Alton to produce 6,600 units of a modification of the new product. This modification would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $5 (not $10). Alton would sell the modified product to SHC for $32 per unit. Print Required 1-a. Calculate the contribution margin for 6,600 units for both the current and special order 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 23,200 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? References Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Calculate the contribution margin for 6,600 units for both the current and special order Contribution Margin Current Special order Req 1A Req 1B 10 Alton Inc. is working at full production capacity producing 28,000 units of a unique product. Manufacturing costs per unit for the product are as follows: 10 $ 9 Direct materials Direct labor Manufacturing overhead points 10 $27 Total manufacturing cost per unit ook The per-unit manufacturing overhead cost is based on a $4 variable cost per unit and $168,000 fixed costs. The nonmanufacturing costs, all variable, are $10 per unit, and the sales price is $42 per unit Print Sports Headquarters Company (SHC) has asked Alton to produce 6,600 units of a modification of the new product. This modification would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $5 (not $10). Alton would sell the modified product to SHC for $32 per unit. References Required 1-a. Calculate the contribution margin for 6,600 units for both the current and special order. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 23,200 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Suppose that Alton Inc. had been working at less than full capacity to produce 23,200 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? (Round your answer to 2 decimal places.) Minimum price Req 1B Req 2
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