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Assignment #8 (Chapter 11) 0 Saved Help 1 Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 23,000 units of one of its most popular products. Grant currently manufactures 46,000 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 $10 because she is sure that Grant will get the business at that price. Others on the executive committee of the rm object, saying that Grant would lose money on the special order at that price. Units 46,000 69,000 Manufacturing costs: Direct materials $ 92,000 $138,000 Direct labor 138,000 207,000 Factory overhead 322,000 414,000 Total manufacturing costs $552,000 $759,000 Unit cost $ 12 $ 11 l Required 2. What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would be the impact on short-term operating income if the order is accepted at the price recommended by the sales manager? 4. What would the total opportunity cost be if by accepting the special order the company lost sales of 6,400 units to its regular customers? Assume the preceding facts plus a normal selling price of $22 per unit. Complete thls queetlon by enterlng your answers In the tab: below. Required 2 Required 4 What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would be the impact on short-term operating income if the order is accepted at the price recommended by the sales manager? Relevant cost per unit Bid price per unit should be any price above Change in short-term operating income Save 8. Exit Submit Assignment #8 (Chapter 11) 0 Saved Help 1 Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 23,000 units of one of its most popular products. Grant currently manufactures 46,000 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 $10 because she is sure that Grant will get the business at that price. Others on the executive committee of the rm object, saying that Grant would lose money on the special order at that price, Units 46.000 69,000 Manufacturing costs: Direct materials $ 92,000 $138,000 Direct labor 138,000 207,000 Factory overhead 322,000 414,000 Total manufacturing costs $552,000 $759,000 Unit cost $ 12 $ 11 . Required 2. What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would be the impact on short-term operating income if the order is accepted at the price recommended by the sales manager? 4. What would the total opportunity cost be if by accepting the special order the company lost sales of 6,400 units to its regular customers? Assume the preceding facts plus a normal selling price of $22 per unit. Complete thls questlon by enteran your answers In the tabs below. Required 2 Required 4 What would the total opportunity cost be if by accepting the special order the company lost sales of 6,400 units to its regular customers? Assume the preceding facts plus a normal selling price of $22 per unit. ( Required 2 Save 8: Exit Submit Assignment #8 (Chapter 11) i Saved Help Save & Exit Submit 2 Alton Inc. is working at full production capacity producing 34,000 units of a unique product. Manufacturing costs per unit for the product are as follows: Direct materials $10 Direct labor Manufacturing overhead 11 Total manufacturing cost per unit $30 The per-unit manufacturing overhead cost is based on a $6 variable cost per unit and $170,000 fixed costs. The nonmanufacturing costs, all variable, are $8 per unit, and the sales price is $55 per unit. Sports Headquarters Company (SHC) has asked Alton to produce 6,000 units of a modification of the new product. This modification would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $4 (not $8). Alton would sell the modified product to SHC for $40 per unit. Required 1-a. Calculate the contribution margin for 6,000 units for both the current and special order. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 28,600 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Calculate the contribution margin for 6,000 units for both the current and special order. Contribution Margin Current Special order -- v \"nu\"..-- .., v if ,,,,,,,, "my Alton Inc. is working at full production capacity producing 34,000 units of a unique product. Manufacturing costs per unit for the product are as follows: Direct materials $10 Direct labor 9 Manufacturing overhead 11 Total. manufacturing cost per unit $30 The per-unit manufacturing overhead cost is based on a $6 variable cost per unit and $170,000 fixed costs. The nonmanufacturing costs, all variable, are $8 per unit, and the sales price is $55 per unit. Sports Headquarters Company (SHC) has asked Alton to produce 6,000 units of a modication ofthe new product. This modication would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $4 (not $8). Alton would sell the modied product to SHC for $40 per unit. Required 1-a. Calculate the contribution margin for 6,000 units for both the current and special order. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 28,600 units ofthe product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions? Complete this question by entering your answers in the tabs below. ' uppose that Alton Inc. had been working at less than full capacity to produce 28,600 units of the product when SHC made gthe offer. What is the minimum price per unit that Alton should accept for the modied product under these : ' \"d't'ms'(andYWranswermZdec'ma'P'aces) any: u call
