Gentex Electrical Corporation is a maker of fuse box for a variety of contractors. Sometime during the year, a customer offered them to purchase 10,000 units, however, a slight modification should be made. His staff developed the following data: Offered price per unit Direct labor Overhead P12.00 5.00 8.00 P25.00 Total The company desires a gross margin of 15% of the manufacturing costs. Required: 1. Assuming the use of cost-plus pricing, setting at the price 15% above the manufacturing costs. What price would be charged for the fuse boxes? 2. Would you accept the offer or not? Why?
Gentex Electrical Corporation is a maker of fuse box for a variety of contractors. Sometime during the year, a customer offered them to purchase 10,000 units, however, a slight modification should be made. His staff developed the following data: Offered price per unit Direct labor Overhead P12.00 5.00 8.00 P25.00 Total The company desires a gross margin of 15% of the manufacturing costs. Required: 1. Assuming the use of cost-plus pricing, setting at the price 15% above the manufacturing costs. What price would be charged for the fuse boxes? 2. Would you accept the offer or not? Why?
Chapter1: Financial Statements And Business Decisions
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![12.16
Gentex Electrical Corporation is a maker of fuse box for a variety of contractors.
Sometime during the year, a customer offered them to purchase 10,000 units, however, a slignt
modification should be made. His staff developed the following data:oong world vo
Offered price per unit
P12.00
Direct labor
5.00
Overhead
8.00
P25.00
Total
The company desires a gross margin of 15% of the manufacturing costs.
Required:
1. Assuming the use of cost-plus pricing, setting at the price 15% above the
manufacturing costs. What price would be charged for the fuse boxes?
2. Would you accept the offer or not? Why?
mor
160 000 1units of Product X during the year. The](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d1f905b-0a40-49cd-ab24-03a5e57fdf05%2F0eea923f-04dc-4e53-9db0-c68ca08f0a73%2Fn7ozm3f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:12.16
Gentex Electrical Corporation is a maker of fuse box for a variety of contractors.
Sometime during the year, a customer offered them to purchase 10,000 units, however, a slignt
modification should be made. His staff developed the following data:oong world vo
Offered price per unit
P12.00
Direct labor
5.00
Overhead
8.00
P25.00
Total
The company desires a gross margin of 15% of the manufacturing costs.
Required:
1. Assuming the use of cost-plus pricing, setting at the price 15% above the
manufacturing costs. What price would be charged for the fuse boxes?
2. Would you accept the offer or not? Why?
mor
160 000 1units of Product X during the year. The
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