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ut forces on a cost-plus basis. The production cost of a particular jet engine is shown below: Direct material 200000 Direct labor 150000 20000 Manufacturing
ut forces on a cost-plus basis. The production cost of a particular jet engine is shown below: Direct material 200000 Direct labor 150000 20000 Manufacturing overhead: Supervisors salaries Fringe benefits on direct labor depreciation 15000 12000 rent 11000 Total cost 408000 If production of this engine was discontinued, the production capacity would be idle, and the supervisor would not be laid off. The depreciation referred to above is for special equipment that would have no resale value and that does not wear out through use. When asked to bid on the next contract for this engine, the minimum unit price that Power Systems should bid is: 0 a $397,000 O b. $365,000 O c. $385,000 O d. $408,000 Clear my choice Next page
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