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The following is known about Shutter Company, who makes three products: Garbles, Minkies, and Bungles. All dollar numbers are per unit. Sales commissions are paid
The following is known about Shutter Company, who makes three products: Garbles, Minkies, and Bungles. All dollar numbers are per unit. Sales commissions are paid to salespeople for each unit sold. Product- Selling Price Direct Materials Direct Labor Variable Overhead Fixed Overhead Sales Commissions Other Allocated Fixed Costs Garbles- $28 $7 $6 $3 Minkies- $45 $13 $10 $5 Bungles- $70 $20 $16 $8 $5 $1 $6 $6 $2 $8 $9 $4 $10 All three products are made in the same factory. It is estimated that eliminating any one of the products would save $9,000 total in allocated fixed costs. No other fixed costs would be impacted by dropping a product as all fixed overhead is unavoidable. 11. If Shutter had the capacity to make 220 Bungles, but expected to only sell 180 in the period, what would the minimum acceptable price be per unit on a special order of 120 Bungles, if sales commissions would be cut in half for the order
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