Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 23,500 units of one of its most popular products. Grant currently manufactures 47,000 units of this product in its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $11 because she is sure that Grant will get the business at that price. Others on the executive committee of the firm object, saying that Grant would lose money on the special order at that price.

Units 47, BOB 76, 580 Manufacturing COSTS ! Direct materials $ 117 , 50 0 $ 176, 250 Direct labor 154, 580 245, 750 Factory Overhead 329, BBB 423, BOB Total manufacturing COSTS $ 61 1, BOB $ 846, 680 Unit cost 13 12