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Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 2 1 , 5 0 0
Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for units of one of its most popular products. Grant currently manufactures units of this product in its Loveland, Ohio, plant. The plant is operating at capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $ 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 Manufacturing costs: Direct materials $ $ Direct labor Factory overhead Total manufacturing costs $ $ Unit cost $ $ Required: What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be the impact on shortterm operating income if the order is accepted at the price recommended by the sales manager? What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular customers? Assume the preceding facts plus a normal selling price of $ per unit.Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for units of one of its most popular products. Grant currently manufactures units of this product in its Loveland, Ohio, plant. The plant is operating at capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $ 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. Required: What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be the impact on shortterm operating income if the order is accepted at the price recommended by the sales manager? What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular customers? Assume the preceding facts plus a normal selling price of $ per unit. Complete this question by entering your answers in the tabs below. Required What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be the impact on shortterm operating income if the order is accepted at the price recommended by the sales manager? Required What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular customers? Assume the preceding facts plus a normal selling price of $ per unit.
Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for units of one of its most popular products. Grant currently manufactures units of this product in its Loveland, Ohio, plant. The plant is operating at capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $ 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
Manufacturing costs:
Direct materials $ $
Direct labor
Factory overhead
Total manufacturing costs $ $
Unit cost $ $
Required:
What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be the impact on shortterm operating income if the order is accepted at the price recommended by the sales manager?
What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular customers? Assume the preceding facts plus a normal selling price of $ per unit.Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for units of one
of its most popular products. Grant currently manufactures units of this product in its Loveland, Ohio, plant. The plant is
operating at capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at
$ 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.
Required:
What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be the
impact on shortterm operating income if the order is accepted at the price recommended by the sales manager?
What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular
customers? Assume the preceding facts plus a normal selling price of $ per unit.
Complete this question by entering your answers in the tabs below.
Required
What is the relevant cost per unit? What do you think the minimum shortterm bid price per unit should be What would be
the impact on shortterm operating income if the order is accepted at the price recommended by the sales manager?
Required
What would the total opportunity cost be if by accepting the special order the company lost sales of units to its regular
customers? Assume the preceding facts plus a normal selling price of $ per unit.
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