Firefox File Edit View History Bookmarks Tools Window Help | Fol, 2017 ACCT 2010-11 1201 Chp 3 Nnwrk Part 21 CSuF Portal-Homex TITAN um x U eno meducation.com/hm.tpx Two dollars of gross margin per briefcase? That's idculous" roared Roy Thurmond, president of First-Line Cases, Inc. Why do we go on producing those standard briefcases when we're able to make over $9 per unit on our specialty itoms? Mayte is time to get out of the standard line and focus the whole plant on Mr. Thurmond was referring to a summary of unit costs and revenues that he had just received from the company's accounting department Brielcases Briefcases S 2925 Selling price per unit Unit product oost 4350 27.25 34.30 Gross margin per unit s 200 9.20 Firstline Cases produces briefcases from leather, fabric, and synthec materials in a single plant. The basic product is a standard brieficase that is made from leather lined with fabric. The standard briefcase is a high qualty tom and has sold well for many years. Last year, the company decided to expand its product line and produce specialty brikcases for special orders Those trotcases dflo, bon, he standard in that tvey vary in suo, they ortan the finest leather and syndvetic materials, and they are imprinted with the buyers name. To reduoe labor costs on the speciality briefcases, automated machines do most of the lesser degree in the production of standard brisfcases. outsing and sitching These machines are used to a much 1 agree that the specialty business is looking beter and better" replied Beth Mersey, the company's maining marager "And two wers to bo plorey of demand out the e, priculary because the competition ha been able to toucdh our price. Did you krow that Veisun Company our biggest oompettor charges aver $53 a unit for is specialty terns? Now that's what lI call gouging the austomerit A breakdown of the manufacturing cost for each of Frstine Cases products is given below Standard Speciaity Brielcases Briefcases 3,000 15,000 Direct averials: Leather Fabric Byntheic 3 00 8 00 The Stud for campu Titanium 001