Fresh Foods Manufacturing is approached by Mr. John Doe, a new customer, to fulfil a one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers: • • • Direct materials: $430 Direct labor: $275 Variable manufacturing support: $45 Fixed manufacturing support: $95 Total manufacturing costs: $845 Markup (50%): $422.5 Targeted selling price: $1,267.5 Fresh Foods Manufacturing has excess capacity. Mr. Doe wants the product to be in a premium version, which increases the direct material costs by $50 per unit. The average marketing cost for Fresh Foods Manufacturing is $120 per order. For Fresh Foods Manufacturing, what is the full cost of the one-time-only special order? A

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter13: Lean Manufacturing And Activity Analysis
Section: Chapter Questions
Problem 14E
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I am trying to find the accurate solution to this general accounting problem with the correct explanation.

Fresh Foods Manufacturing is approached by Mr. John Doe, a new customer, to
fulfil a one-time-only special order for a product similar to one offered to
regular customers. The following per unit data apply for sales to regular
customers:
•
•
•
Direct materials: $430
Direct labor: $275
Variable manufacturing support: $45
Fixed manufacturing support: $95
Total manufacturing costs: $845
Markup (50%): $422.5
Targeted selling price: $1,267.5
Fresh Foods Manufacturing has excess capacity. Mr. Doe wants the product to
be in a premium version, which increases the direct material costs by $50 per
unit. The average marketing cost for Fresh Foods Manufacturing is $120 per
order.
For Fresh Foods Manufacturing, what is the full cost of the one-time-only
special order?
A
Transcribed Image Text:Fresh Foods Manufacturing is approached by Mr. John Doe, a new customer, to fulfil a one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers: • • • Direct materials: $430 Direct labor: $275 Variable manufacturing support: $45 Fixed manufacturing support: $95 Total manufacturing costs: $845 Markup (50%): $422.5 Targeted selling price: $1,267.5 Fresh Foods Manufacturing has excess capacity. Mr. Doe wants the product to be in a premium version, which increases the direct material costs by $50 per unit. The average marketing cost for Fresh Foods Manufacturing is $120 per order. For Fresh Foods Manufacturing, what is the full cost of the one-time-only special order? A
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