Wesco incorporated's only product is a combination fertilizeriweedkiller called GrowNWeed. GrowNWeed is sold nationwide to retail nurseries and garden stores Zwinger Nursery plans to sell a simtiar fertilizer/weedkilier compound through its regional nursery chain under its own private label. Zwinger does not have manufacturing facilities of its own, so it has asked Wesco (and several other companies) to submit a bid for manulacturing and delivering a 32,000 -pound order of the pivate brand compound to Zwinger. Whife the chemical composition of the Zwinger compound differs from that of GrowNWeed, the manufacturing processes are very similar The Zwinger compound would be produced in 1,000-pound lots, Each lot would require 35 direct labor-hours and the following chemicals The first three chemicals (AG-5, KL-2, and CW.7) are all used in the production of GrowNWeed. DF-6 was used in another compound that Wesco discontinued several months ago. The supply of DF-6 that Wesco had on hand when the other compound was discontinued was not discarded. Wesco could sell its supply of DF-6 at the prevailing market price less $010 per pound selling and handling expenses. Wesco also has on hand a chemical called BH3, which was manufactured for use in another product that is no longer produced. BH3. which cannot be used in GrowNWeed, can be substituted for AG-5 on a one-for-one basis without affecting the quality of the Zwinger compound. The BH3 in inventory has a salvage value of $550. Inventory and cost data for the chemicals that can be used to produce the z winger compound are shown below: The curtent direct labor wage tate is $16 per hour. The predetermined overhead rate is based on diect labor hours (D) H. The predetermined overhead rate for the current year, based on a two-shift capacity with no overtame, is as follows: Wesco's production manager repons that the present equipment and facilties are adequate to manufocture the Zwinger compound Therefore, the order would have no effect on total fixed manufacturing overhesd costs. Howeves, Wesco is within 100 hours of its twoshift capacity this month. Any additional hours bevond the 100 hours must be done in overtime. If need be, the Zwinger compound could be produced on regular time by shiting a portion of GrowNWeed production fo overtime. Wesco's direct tabor wage rate for overtime is $24 per hour. There is no allowance for any overtine premium in the predetermined owerhead rate: Required: 1. Wesco has decided to submit a bid for the 32,000 pound order of Zwingers new conpoind. The oider must be delinered by the end of the current month. Zwinger has inclicated that this is a one-time order that wil not be repeated Calculate the lowest pice that Wesco could bid for the onder and stil exactly cover its incremental manufactiring costs. 2. Refer to the onginal data. Assume that Zwinger Nursery plans to place regular orders for 32,000 pound lots of the new compound Wesco expects the demand for GrowNWeed to remain strong Thetefore, the recurting orders from Zwinger would put Wesco over its two-shift capacty. However, production could be scheduled so that 60% of each Zwinger order could be completed during regular hours. As another option, some GrowNWeed production could be shifted temporanly to overtime so that the Zwinger orders could be produced on regular time Current market prices are the best ovailable estimates of future narket prices. Wesco's standard markup policy for new products is 40% of the ful manufactuing cost, including fowd manufacturing overhead Calculate the price that Wesco, incorporated, would quote Zwinger Nursery for each 32.000 pound fot of the new compound. Complete this question by entering your answers in the tobs below. Refer to the original data. Assume that Zwinger Nursery plans to place regular orders for 32,000 -pound lots of the new compound. Wesco expects the demand for GrowNWeed to remain strong. Therefore, the recurring orders from Zwinger would put Wesco over its two-shift capacity. However, production could be scheduled so that 60% of each Zwinger order could be completed during regula hours. As another option, some GrowNWeed production could be shifted temporarily to overtime so that the Zwinger orders could be produced on regular time. Current market prices are the best available estimates of future market prices. Wesco's standard markup policy for new products is 40% of the full manufacturing cost, including fixed manufacturing overhead. Calculate the price that Wesco, Incorporated, would quote Zwinger Nursery for each 32,000 pound lot of the new compound, assuming that it is to be treated as a new product and this pricing policy is followed. (Round your intermediato DLHs to the nearest whole hour. Round all other intermediate calculations and final answers to 2 decimal places.) Wesco has decided to submit a bid for the 32,000 pound order of Zwinger's new compound. The order must be delivered by the end of the current month. Zwinger has indicated that this is a one-time order that will not be repeated. Calculate the lowest price that Wesco could bid for the order and still exactly cover its incremental manufacturing costs. (Round all Intermediate calculations and final answer to 2 decimal places.)