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Check my work Alton Incorporated is working at full production capacity producing 31,000 units of a unique product. Manufacturing costs per unit for the product
Check my work Alton Incorporated is working at full production capacity producing 31,000 units of a unique product. Manufacturing costs per unit for the product are as follows: Direct materials Direct labor Manufacturing overhead Total manufacturing cost per unit $ 7 6 8 $ 21 The per-unit manufacturing overhead cost is based on a $3 variable cost per unit and $155,000 fixed costs. The nonmanufacturing costs, all variable, are $10 per unit, and the sales price is $38 per unit. Sports Headquarters Company (SHC) has asked Alton to produce 7,200 units of a modification of the new product. This modification would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $5 (not $10). Alton would sell the modified product to SHC for $28 per unit. Required 1-a. Calculate the co ribution margin for 7,200 units for both the current and special der. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Incorporated had been working at less than full capacity to produce 25,900 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Calculate the contribution margin for 7,200 units for both the current and special order. LI Prey. 1 of 5 Next >
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