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both parts please Sun Pharmaceuticals Pty Ltd is a wholesaler that specialises in packaging bulk drugs, in standard dosages, for local hospitals. The company has
both parts please
Sun Pharmaceuticals Pty Ltd is a wholesaler that specialises in packaging bulk drugs, in standard dosages, for local hospitals. The company has been in business for seven years and has been profitable since its second year of operation. Jenny White, the assistant accountant, installed a standard costing system after joining the company three years ago. The Starbright Children's Hospital has asked Sun Pharmaceuticals Pty Ltd to bid on the packaging of one million doses of medication at total product cost plus a markup on total cost of no more than 15 per cent. Starbright defines total product cost as including all variable costs of performing the service, a reasonable amount of fixed overhead and reasonable administrative costs. The hospital will supply all packaging materials and ingredients. Starbright has indicated that any bid more than $0.045 per dose will be rejected. Jenny White has accumulated the following information prior to the preparation of the bid: Direct Labour Variable overhead Fixed overhead Incremental administrative costs Production rate S36 per direct labour hour (DLH) $18 per DLH $30 per DLH $ 3,000 for the order 3,000 doses per DLH 7 Required a) Calculate the minimum price per dose that Sun Pharmaceuticals could bid for the Starbright job without reducing its profit. (5 Marks) b) Calculate the bid price per dose using total product cost and the maximum markup specified by Starbright. (5 Marks) c) Explain two (2) factors that influence the product mix decisions Step by Step Solution
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