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Question 5: (20 marks total) Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30% markup to full costs
Question 5: (20 marks total) Digital Amplification manufactures high-tech cell phones. Digital Amplification products have a policy of adding a 30% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month: phones Output units Machine-hours Direct manufacturing labor-hours 10,000 8,000 5,000 hours hours $25 Direct materials per unit Direct manufacturing labor per hour Variable manufacturing overhead costs $15 $175.000 SUSIM INIMEONATI MANAGERIAL ACCOUNT YORKVILLE www.VOLVICA $425,000 Fixed manufacturing overhead costs Product and process design costs Marketing and distribution costs $400,000 $475,000 Digital Amplification is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $15,000. No additional design, marketing or distribution costs will be incurred. Required a. What is the minimum acceptable bid per unit on this one-time-only special order? b. What is the full product cost
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