Your company manufactures bike helmets and is asked to fulfill a special order of customized bike helmets for a special event. The event organizers are offering $9 per bike helmet and they need 1700 helmets. Your company doesn't have the capacity to fulfill the special order unless you stop the regular production schedule. Other information from the financial accounting system is listed below. What would be the per unit opportunity cost if your company accepts the special order? Racing bike helmet Direct material $5.00 Direct labor $2.00 Manufacturing overhead: variable $0.42 Manufacturing overhead: fixed $1.43 Total manufacturing cost $8.85 Non-manufacturing overhead: variable $0.27 Non-manufacturing overhead: fixed $0.68 Total cost $9.80 Commuter helmet price $13.00 Machine hour 0.43 Which one of these? a. $5.31 b. $0.80 c. $9 d. $1.31
Your company manufactures bike helmets and is asked to fulfill a special order of customized bike helmets for a special event. The event organizers are offering $9 per bike helmet and they need 1700 helmets. Your company doesn't have the capacity to fulfill the special order unless you stop the regular production schedule. Other information from the financial accounting system is listed below. What would be the per unit opportunity cost if your company accepts the special order?
|
Racing bike helmet |
|
|---|---|
|
Direct material |
$5.00 |
|
Direct labor |
$2.00 |
|
Manufacturing |
$0.42 |
|
Manufacturing overhead: fixed |
$1.43 |
|
Total |
$8.85 |
|
Non-manufacturing overhead: variable |
$0.27 |
|
Non-manufacturing overhead: fixed |
$0.68 |
|
Total cost |
$9.80 |
|
|
|
|
Commuter helmet price |
$13.00 |
|
Machine hour |
0.43 |
a. $5.31
b. $0.80
c. $9
d. $1.31
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