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The Zubair manufacturing company manufactures cycles of different models. Its manufacturing plant has the capacity to produce 5.000 cycles each month. Current production and sales
The Zubair manufacturing company manufactures cycles of different models. Its manufacturing plant has the capacity to produce 5.000 cycles each month. Current production and sales are 4,500 cycles per month. The company normally charges $250 per yde. Cost information for the current activity level is as follows: Variable costs that vary with number of units produced Direct materials $200,000 Direct manufacturing labor $300,000 Variable costs for setups, materials handling, quality control, and so on) that vary with number of batches, 100 batches 5700 per batch $70,000 Fixed manufacturing costs $ 270,000 Zubair manufacturing company has just received a special one time only order for 500 cycles at $170 per cycle. Accepting the special order would not affect the company regular busine The special order requires Zubair manufacturing company to make the rydes in 20 batches of 25 ydes in each batch Required: A). What are the total costs currently incurred to manufacture 4,500 cycles? (3 marks) B). Should Zubair manufacturing company accept this special order? Show your calculationt. a marks) Which TWO non-quantitative factors should be considered by Zubair manufacturing company in the above situation of decision-making? (1 mark)
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