cost accounting please solve all questions
PENNSYLVANIA CORPORATION .......has developed a new product, cleverly named Product X, the cost information for which is as follows: Direct materials $75,000 per unit Direct labor rate $25 per hour Variable overhead: Applied on the basis of direct-labor hrs $6 per hour Fixed overhead: Applied on the basis of direct-labor hrs $10 per hour Variable selling $3,000 per unit Fixed selling $1,000 per unit Variable adminstra $2,500 per unit Fixed administrative $2,000 per unit REQUIRED: 1) The company has received an order to produce 3 units which will require 15,000 direct labor hours. They have ample capacity to produce the additional 3 units without disrupting other operations. The company's normal pricing method is to price these parts on a "cost-plus" basis using full manufacturing cost as the basis for their bid and a markup of 25%. How much should the company bid on this project? 2) Assume the same situation, and the company has now received a one-time special order from a foreign customer for 3 units, at a total price of $725,000. Again, assume that there is ample capacity to produce the required units without affecting normal operations and that these three units will require 15,000 direct labor hours as noted above. a) What is the "real cost of accepting this order? What are the benefits? b) Should they accept or reject this order? Why or not? How much better or worse off would they be if the accepted this order? What is the minimum price that they must charge for this order, in total and per-unit, without negatively affecting their profit? MARINA 3) Assume the same facts as #2 above, except that they are currently operating at full capacity and that accepting the special order will require them to displace regular work. Assume that the labor hours required for the 3 additional units of Product X could have been used to produce 10 units of their other product, Product Y, for which the following per-unit information is available: Selling price Direct materials Direct labor Variable overhead Fixed overhead Variable selling Fixed selling Variable administrative Fixed adminstrative $ 96,000 $ 15,000 25,000 6,000 10,000 4,000 1,000 000 1,000 a) NOW what is the "real cost"? b) Should they accept or reject the order? Why or why not? How much better or worse off would they be if they took this order? What is the minimum price that they could charge for this order, in total AND per unit, without affecting their bottom line