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 of 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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