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A new potential customer came to Wayback Homes, offering to pay $20 per unit for an order of 100 old-fashioned toasters to promote a
A new potential customer came to Wayback Homes, offering to pay $20 per unit for an order of 100 old-fashioned toasters to promote a nostalgic feeling in its RVs. The customer is not willing to pay full price for the toasters, however, recognizing that it could go elsewhere and find a reasonable substitute product that would provide a similar customer experience. Accounting staff at Wayback told the sales and operations managers that the special order can't be accepted unless Wayback can reduce its costs by 20%, even though it has production capacity to take on this special order. Some of Wayback's old-fashioned toaster unit costs are as follows. DM $12.00 DL 6.00 Variable SG&A 2.00 Fixed SG&A 2.50 Which costs is the accounting staff referring to when it notes that Wayback must reduce its costs? In the costs given above, are any costs missing? (Round answers to 2 decimal places, e.g. 15.25.) DL DM Variable-MOH Variable SG&A 5 cost is missing.
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