Question
Halifax Pharmacy is a wholesaler that specializes in packaging bulk drugs, in standard dosages, for local hospital. Blaney Childrens Hospital has asked Halifax to bid
Halifax Pharmacy is a wholesaler that specializes in packaging bulk drugs, in standard dosages, for local hospital. Blaney Childrens Hospital has asked Halifax to bid on the packaging of one million doses of medication at total product cost plus a mark-up on total cost of no more tan 15%. Blaney definestotal product costas including all variable costs of performing the service, a reasonable amount of fixed overhead, and reasonable administrative costs. The hospital will supply all packaging materials and ingredients. Halifax has accumulated the following information prior to the preparation of the bid:
Direct labor | $24 per direct labor hour(DLH) |
Variable overhead | $12 per DLH |
Fixed overhead | $20 per DLH |
Incremental administrative costs | $2,000 for the order |
Production rate | 2,000 doses per DLH |
Calculate the minimum price per dose that Halifax could bid for the Blaney job without reducing Halifaxs profit.
A.$0.030 per dose
B.$0.028 per dose
C.$0.345 per dose
D.$0.023 per dose
E.$0.020 per dose
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