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Zena Technology sells arc computer printers for $54 per unit. Unit product costs are: Direct materials $13 Direct labor 21 Manufaturing overhead 3 Total $37 A special order to purchase 10,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $1 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order? per unit

Zena Technology sells arc computer printers for $54 per unit. Unit product costs are: Direct materials $13 Direct labor 21 Manufaturing overhead 3 Total $37 A special order to purchase 10,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $1 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order? per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Zena Technology sells arc computer printers for $54 per unit. Unit product costs are: Direct materials $13 Direct labor 21 Manufaturing overhead 3 Total $37 A special order to purchase 10,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $1 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order? per unit
Transcribed Image Text:Zena Technology sells arc computer printers for $54 per unit. Unit product costs are: Direct materials $13 Direct labor 21 Manufaturing overhead 3 Total $37 A special order to purchase 10,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $1 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order? per unit
Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $21,600 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,000 Direct labor 5,100 Manufacturing overhead 6,900 Total $25,000 The manufacturing overhead consists of $1,900 of variable costs with the balance being allocated to fixed costs. A. Calculate the differential cost of Acme? B. Should Almond Treats make or buy the almond cereal?
Transcribed Image Text:Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $21,600 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,000 Direct labor 5,100 Manufacturing overhead 6,900 Total $25,000 The manufacturing overhead consists of $1,900 of variable costs with the balance being allocated to fixed costs. A. Calculate the differential cost of Acme? B. Should Almond Treats make or buy the almond cereal?
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