Kator Co. is a manufacturer of industrial components. One of their products that is used as a sub-component in auto manufacturing is KB-96. This product has the following financial structure per unit. Selling price P 150 Direct materials P 20 Direct labor 15 Variable manufacturing overhead 12 Fixed manufacturing overhead 30 Fixed selling 3 Fixed administrative 10 Total costs P 90 Kator Co. has received a one-time special order for 1,000 KB-96 parts. Assuming Kator has excess capacity and the special order customer does not compete with Kator's “regular” customers, the minimum price that is acceptable for this one-time special order is in excess of: Group of answer choices P77. P77 P57 P47. P90.
Kator Co. is a manufacturer of industrial components. One of their products that is used as a sub-component in auto manufacturing is KB-96. This product has the following financial structure per unit. Selling price P 150 Direct materials P 20 Direct labor 15 Variable manufacturing overhead 12 Fixed manufacturing overhead 30 Fixed selling 3 Fixed administrative 10 Total costs P 90 Kator Co. has received a one-time special order for 1,000 KB-96 parts. Assuming Kator has excess capacity and the special order customer does not compete with Kator's “regular” customers, the minimum price that is acceptable for this one-time special order is in excess of: Group of answer choices P77. P77 P57 P47. P90.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kator Co. is a manufacturer of industrial components. One of their products that is used as a sub-component in auto manufacturing is KB-96. This product has the following financial structure per unit.
Selling price P 150
Direct materials P 20
Direct labor 15
Variable manufacturing overhead 12
Fixed manufacturing overhead 30
Fixed selling 3
Fixed administrative 10
Total costs P 90
Kator Co. has received a one-time special order for 1,000 KB-96 parts. Assuming Kator has excess capacity and the special order customer does not compete with Kator's “regular” customers, the minimum price that is acceptable for this one-time special order is in excess of:
Selling price P 150
Direct materials P 20
Direct labor 15
Variable manufacturing overhead 12
Fixed manufacturing overhead 30
Fixed selling 3
Fixed administrative 10
Total costs P 90
Kator Co. has received a one-time special order for 1,000 KB-96 parts. Assuming Kator has excess capacity and the special order customer does not compete with Kator's “regular” customers, the minimum price that is acceptable for this one-time special order is in excess of:
Group of answer choices
P77.
P77
P57
P47.
P90.
P50.
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