In House Equipment Bought Two Years Ago 75000 5) Acme manufactures compressors. it anticipates selling 20,000 with the following cost Total Cost Cost Per Unit Direct Materials Direct Labor Variable Overhead120000 Fixed Overhead 1000000 S0 40 30 126 Total 2520000 Another company has offered to build these units for $115 each or $2300000. a) Should Acme accept this offer if $405000 of fixed overhead can be avoided by accepting it? Show analysis of your recommendation. b) Should Acme accept this offer if no fixed overhead can be avoided. But resources freed up that will allow them to accept a special job that will generate addititonal income of of $375000. Show analysis of your recommendation. 6) The formula for Target Pricing is Market Price(given) - Desired Profit (given) - Target Cost Why is the profit (dollars and percentage) likely to be lower using Target Pricing than using other pricing methods? 7) Newbie Co. makes Office Desks. It anticipates selling 30000 of them this year with the following cost structure Per Unit Total 17 Direct Materials Direct Labor Variable Mfg, OH Fixed Mfg OH Variable Admin/Selling Fixed Admin/Selling 150000 a) What is the total cost per unit? b) what is the total selling price per unit if Newbie uses a 40% markup? c) What is the total selling price per unit if Newbie has invested 280000 and requires an ROI of 20% ? 8) Using Time and Material pricing, What is the charge for a 4 hour job using the following ata. Total labor charge per hour Labor profit margin per hour Costs of Parts and Material Material Loading Charge 22.50 10.00 50.00 40%