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15. Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers.
15. Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has a policy of adding a 10% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $30 Direct labor 10 Manufacturing overhead 15 Marketing costs 5 Fixed costs: Manufacturing overhead 100 Marketing costs 20 Total costs 180 Markup (10%) 18 Estimated selling price $198 i. For Welch Manufacturing, what is the minimum acceptable price of this one-time-only special order? ii. What is the full cost of the product per unit? iii. If the European customer wanted a long-term commitment for supplying this product, what price would MOST likely be quoted
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