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ET IGHER EDUCATION EXAMINATION BOOKLET Student name: QUESTION 7 - Relevant costing on a special order (9 Marks) Capland Manufacturers Ltd is approached by a European customer to fulfil a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: $120 60 105 Variable costs: Direct materials Direct labour Manufacturing costs Marketing costs Fixed costs: Manufacturing costs Marketing costs 45 135 45 The targeted selling price for regular customers is calculated by applying a mark-up of 50%. Required: (i) What is the full cost of the product per unit? (1 Mark) (ii) What is the contribution margin per unit? (2 Marks) HIGHER EDUCATION Student name: QUESTION 7 (Continued) (ii) For Capland Manufacturers Ltd, what is the minimum acceptable price of this special (2 Marks) order? (iv) What is the change in operating profits if the one-time-only special order for 1,000 units is accepted for $540 a unit by Capland Manufacturers Ltd? (2 marks) (v) What other factors should Capland Manufacturers Ltd.'s management consider before accepting or rejecting the special order? (2 marks) O TAFE NSW - Higher Education Semester 2, 2015 Page 22 of 24