IMG-20240104-WA0169

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School

Christ College Of Education *

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Course

MISC

Subject

Industrial Engineering

Date

Nov 24, 2024

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jpg

Pages

1

Uploaded by ProfessorValor4037

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Exercises 3-34 Page 58 (5 points) Centrum Manufacturing makes a single product with the following attributes: Product per Unit Price $130.00 Varnable costs per unit Direct materials $30.00 Direct labor $40.00 $70.00 Contribution margin per unit $60.00 Fixed costs per unit $20.00 Gross margin per unit $40.00 Direct labor 1s paid $20 per hour, and each unit of the product requires 2 labor hours. Fixed manufacturing overhead is applied to products at the rate of $10 per direct labor hour. Required a. b. Centrum Manufacturing has received an offer from a new customer to buy 20 units of a modified version of the existing product. The modification would require an additional $15 of direct materials cost and an additional 0.50 labor hours for each unit. Centrum Manufacturing has enough 1dle direct labor capacity to fill this order without disrupting existing production and sales. What 1s the minimum price that Centrum Manufacturing should accept per unit for this modified product? Assume now that Centrum Manufacturing 1s operating at its direct labor hour capacity and would need to displace some of 1ts existing production to accept this offer to purchase 20 units of the modified product. What 1s the minimum price that Centrum Manufacturing should accept per unit for this modified product?
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