Question
axle and wheel manufacturing is approached by a european customer to fill a one time only special order for a product similar to one offered
axle and wheel manufacturing is approached by a european customer to fill a one time only special order for a product similar to one offered to domestic customers. the following per unit data apply for sales to regular customers: direct material $33 direct labour $15 variable manfuacturing support $24 fixed manufacturing support $52 total manufacutring costs $124 markup (50%) $62 Target selling price $186 axle and wheel manufacturing has excess capacity. a)what is the full cost of the product per unit? b) what is the contribution margin per unit? c) which costs are relevant for making the decision regarding this one itme only special order? why? d) for axle and wheel manufacturing, what is the maximum acceptable price of this one time only special order? e) for this one time only special order, should axle and wheel manufacutring consider a price of $100 per unit? why or why not?
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