Question
XYZ, Inc. makes Chairs. The normal selling price is $25.00 per unit. ABC wants to buy 6000 units at $20, and ABC will pay the
XYZ, Inc. makes Chairs. The normal selling price is $25.00 per unit. ABC wants to buy 6000 units at $20, and ABC will pay the shipping costs. The per-unit costs traceable to the product (based on a normal capacity of 94,000 units) are listed below. Which costs are relevant to this decision?
Direct materials | $2.20 |
Direct labor | 7.00 |
Variable mfg. overhead | 4.80 |
Fixed mfg. overhead | 2.50 |
Shipping/handling | 1.50 |
Fixed administrative costs | 0.88 |
Fixed selling costs | 0.36 |
$19,24 | |
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
12th Edition
978-0073526706, 9780073526706
