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Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch
Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has a policy of adding a 10% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers:
Variable costs: | |
Direct materials | $40 |
Direct labour | 20 |
Manufacturing overhead | 25 |
Sales commission | 15 |
Fixed costs: | |
Manufacturing overhead | 100 |
Marketing costs | 20 |
Total costs | 220 |
Markup (10%) | 22 |
Estimated selling price | $242 |
What is the full cost of the product per unit?
a.$60
b.$198
c.$155
d.$66
e.$220
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