Zylar Industries is a manufacturer of standard and custom-designed bottling equipment. Early In December 20x0, Lyan Company asked Zylar to quote a price for a custom-designed bottling machine to be delivered in April. Lyan Intends to make a decision on the purchase of such a machine by January 1, so Zylar would have the entire first quarter of 20x1 to build the equipment. Zylar's pricing policy for custom-designed equipment is 50 percent markup on absorption manufacturing cost. Lyan's specifications for the equipment have been reviewed by Zylar's Engineering and Cost Management departments, which made the following estimates for direct material and direct labor. Direct material $266, 020 Direct labor (6,480 hours at $17) 110, 160 applied on the basis of direct-labor hours. Zylar normally plans to run its plant at a level of 15,100 direct- Manufacturing overhead is doomed overhead on the basis of 181,200 direct-labor hours per year. The overhead application rate for 20x1 of $10.00 per hour is based on the following budgeted manufacturing overhead costs for 20x1. variable manufacturing over 906, Bee Total manu uring overhead $1, 812, 080 Zylar's production schedule calls for 13,500 direct-labor hours per month during the first quarter. If Zylar is awarded the contract for the Lyan equipment, production of one of its standard products would have to be reduced. This is necessary because production levels can only be Increased to 15100 direct-labor hours each month on short notice. Furthermore, Zylar's employees are unwilling to work overtime Sales of the standard product equal to the reduced production would be lost, but there would be no permanent loss of future sales or customers. The standard product for which the production schedule would be reduced has a unit sales price of $13,500 and the following cost structure. Direct mater (210 hou $2, 548 Manufacturing overhead (210 hours at $10) Total cost Lyan needs the custom-designed equipment to Increase its bottle-making capacity so that it will not have to buy bottles from an outside supplier. Lyan Company requires 5,180.00 ottles annually. Its present equipment has a maximum capacity of 4,590,000 bottles with a directly traceable cash outlay cost of 16 cents per bottle. Thus, Lyan had to purchase 590,000 bottles from a supplier at ents each. The new equipment would allow Lyan to manufacture its entire annual demand for bottles at a direct-material cost savings of 2 cents per bottle. Zylar estimates that Lyan's annual bottle demand will continue to be 5,180,000 bottles over the next five years, the estimated life of the special-purpose equipment. required: Calculate the bid Zylar would submit if it follows its standard pricing policy for special-purpose equipment 2 . Calculate the minimum bid Zy inimum bid Zylar would be willing to submit on the Lyan equipment that wo margin as planned for the first quarter of 20x1. (Do not round Intermediate calculations.) pment that would result in the same total contribution 1. Standard pricing policy bid 2. Minimum bid