Question
Marquette Manufacturing produces invisible electric dog fences, sold through retail locations nationwide. The selling price of the fence is $150 per unit. The cost to
Marquette Manufacturing produces invisible electric dog fences, sold through retail locations nationwide. The selling price of the fence is $150 per unit. The cost to manufacture and market the fences is shown below. These figures represent the cost at the companys normal volume of 3,000 units per month.
(NOTE: Unless otherwise stated, assume that no connection exists between the situation described in each question; each is independent. Also, ignore taxes or other costs not specifically mentioned in the questions.)
Marquette has an opportunity to sell its product through an online retailer. To begin selling through this online platform, they are required to ship 2,000 units to the retailers order fulfillment warehouse. The other condition of this offer is that they pay a one-time vendor marketing fee of $5,000. To get the units to the fulfillment warehouse by the deadline Marquette will need to pay for expedited shipping at a cost of $10 per unit. What is the minimum price Marquette should charge the retailer for this initial order of 2,000 units? (Show all supporting calculations).
Unit Manufacturing Costs Variable materials $ 15.00 Variable labor $ 17.50 Variable overhead $ 12.50 Fixed overhead $ 16.00 Total unit manufacturing costs $ 61.00 Unit Marketing Costs Variable $ 12.00 Fixed overhead $ 17.00 Total unit marketing costs $ 29.00 Total unit costs $ 90.00Step by Step Solution
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