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Alton Inc. is working at full production capacity producing 25,000 units of a unique product. Manufacturing costs per unit for the product are direct material
Alton Inc. is working at full production capacity producing 25,000 units of a unique product. Manufacturing costs per unit for the product are |
direct material | 6 | 10 |
dirac labor | 5 | 9 |
manufacturing overhead | 7 | 11 |
total manufacturing cost per unit | 18 | 30 |
The unit manufacturing overhead cost is based on a $4 variable cost per unit and $75,000 fixed costs. The nonmanufacturing costs, all variable, are $6 per unit, and the sales price is $31 per unit. | |||||||||||||||||||||||||||||||||||||||||
Sports Headquarters Company (SHC) has asked Alton to produce 6,000 units of a modification of the new product. This modification would require the same manufacturing processes. SHC has offered to share the nonmanufacturing costs equally with Alton. Alton would sell the modified product to SHC for $21 per unit. Contribution margin for $6,000 units for both the curren and special order
Required 2-)
Please answer Required #2. Formulas need to be shown and explanation. thank you |
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