ID Chapter 15 assignments 0 3 Required information The following information applies to the questions displayed below Badger Valve and Fitting Company, located in southern Wisconsin, manufactures a variety of industrial Part 3 of 4[The 3.12 points valves and pipe fittings that are sold to customers in nearby states. Currently, the compary is operating at about 70 percent capacity and is eaming a satisfactory return on investment. Management has been approached by Glasgow industries Ltd. of Scotland with an offer to buy 110000 units of a pressure valve. lasgow Industries manufactures a valve that is almost identical to Badgers pressure valve; however, a fire n Glasgow Industries' valve plant has shut down its manufacturing operations. Glasgow needs the 110,000 valves over the next four months to meet commitments to its regular customers. Glesgow is prepared to pay $3160 pressure valve is $33.00, calculated as follows eBook each for the velves. Badger's total product cost, based on current ettainable standards, for the Print Direct material 8.50 Direct labor Nanufacturing overhead 10.00 ReferencE 14.50 Total product $33.00 Manufacturing overhead is applied to production at the rate of $29 per standard direct-labor hour. This overhead rate is made up of the following components Variable manufacturing overhead 9.00 Pixed nanufacturing overhead (traceable) rixed nanufacturing overhead (allocated) 14.00 6.00 Applied manufacturing overhead529.00 Additional costs incurred in connection with sales of the pressure vaive include sales commissions of 5 percent and freight expense of $140 per unit However, the company does not pay sales commissions on special orders that come directly to management. in determining selling prices, Bedger adds a 35 percent markup to total product cost. This provides $44 55 suggested seling price for the pressure valve. The Marketing Depertment, however, has set the current selling price at $43.05 in order to maintain market share. Production management believes hat it can hande the Glasgow Industries order without disrupting ts scheduled production. The order would, however, require additional fxed factory overhead of $16,500 per month in the form of supervision and clerical costs. if management accepts the order, 27,500 pressure valves will be manufactured and shipped to Glasgow Industries each month for the next four months Glesgow's manegement has agreed to pay the shipping charges for the veaives 3. Calculate the minimum unit price that Badger Valve and Fitting Company's management could accept for the Glasgow Industries order without reducing net income. (Round your answer to 2 decimal places.)
