Question
A camper van converter is preparing a quote for a special order for a friend. The required base commercial van will cost 56,000. The conversion
A camper van converter is preparing a quote for a special order for a friend. The required base commercial van will cost 56,000. The conversion materials, all of which are used regularly, are currently carried in stock at their original purchase price of 6,000. One third of these materials have fallen in price by 10% since their original purchase. A further third are in short supply and allocating them to this special order will mean another order (which will generate a contribution margin 2,300) cannot be met. Fixed overheads are applied to jobs by adding 15% to the base commercial van cost. What is the minimum amount the converter could quote for this special order without reducing profits?
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