Mason Inc. is working at full production capacity producing 29,000 units of unique product. Manufacturing cost per unit for the product is as follow: Direct Materials $10 Direct Labor $9 Manufacturing Overhead $11 Total Manufacturing Cost Per Unit $30 The per unit manufacturing overhead cost is based upon $5 variable cost per unit and $174,000 fixed cost. The non-manufacturing costs, are all variable, are $8 per unit, and the sale price is $45 per unit. Sports Headquaters Company has asked Mason Inc to produce 6,500 units ofa modification of the new product. This modification would require the same manaufactiring process. However beacuse of the nature of the proposed sale, the estimated non-manufacturing costs per units are only $4 (not $8). Manson Inc would sell the product to Sports Headquaters for $35 per unit.. 1(a) Calculate the contribution margin for 65,00 units for both the current and the special order. 1 (b) Should Mason Inc produce the special order for Sports Headquaters? (yes or no) 2. Suppose that Mason Inc had been working at less than full cpacity to produce 24,100 units of the product when Sports Headquaters made the offer. What is the minimum pric per unit that Mason Inc shoud accept for the modified product under these conditions. Round answer to 2 decimal places.
Mason Inc. is working at full production capacity producing 29,000 units of unique product. Manufacturing cost per unit for the product is as follow:
| Direct Materials | $10 |
| Direct Labor | $9 |
| Manufacturing |
$11 |
| Total Manufacturing Cost Per Unit | $30 |
The per unit manufacturing overhead cost is based upon $5 variable cost per unit and $174,000 fixed cost. The non-
Sports Headquaters Company has asked Mason Inc to produce 6,500 units ofa modification of the new product. This modification would require the same manaufactiring process. However beacuse of the nature of the proposed sale, the estimated non-manufacturing costs per units are only $4 (not $8). Manson Inc would sell the product to Sports Headquaters for $35 per unit..
1(a) Calculate the contribution margin for 65,00 units for both the current and the special order.
1 (b) Should Mason Inc produce the special order for Sports Headquaters? (yes or no)
2. Suppose that Mason Inc had been working at less than full cpacity to produce 24,100 units of the product when Sports Headquaters made the offer. What is the minimum pric per unit that Mason Inc shoud accept for the modified product under these conditions. Round answer to 2 decimal places.
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