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Question 1 Chill Products manufactures smart thermostats for home climate control (HVAC) systems. One of its products, the Hello Home model, sells for $75.00
Question 1 Chill Products manufactures smart thermostats for home climate control (HVAC) systems. One of its products, the Hello Home model, sells for $75.00 and has manufacturing costs given in the table. Hi's DIY Stores has requested 5,000 thermostats from Chill. Hi's is offering to pay a unit price of $65.00 per thermostat. The special order items could be based on the Hello Home model but Chill estimates added costs per unit of $7.00 for materials, $2.00 for labor, and $1.00 for variable overhead would be needed. Chill has the capacity to produce the special order units without affecting its regular production of 25,000 units per month. Chill would need to rent testing equipment costing $15,000 to meet Hi's quality control standards. Item Direct Materials Direct Labor Variable overhead Fixed overhead ($2,700,000 per year) Total What is the total revenue associated with the HI's order? 10 pts Cost $ 30.00 $ 14.00 $ 7.00 $ 9.00 $ 60.00
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