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306 - 12 - CostAccounting,13e(Horngrenetal Chapter12 1...

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Cost Accounting, 13e (Horngren et al.)  Chapter 12    1
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Pricing  Decisions  and Cost  Managemen t 190) 
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Schlickau  Company  manufact ures  basketball  backboard s. The  following  informati on  pertains  to the  company' s normal  operations  per  month:  Output units 15,000 boards Machine - hours 4,000 hours Direct manufacturing labor - hours 5,000 hours Direct manufacturing labor per hour $12 Direct materials per unit $100 Variable manufacturing overhead costs $150,000 Fixed manufacturing overhead costs $300,000 Product and process design costs $200,000 Marketing and distribution costs $250,000 Required:  a. For long - run pricing, what is the full - cost base per unit? b. Schlickau Company is approached by an overseas city to fulfill a one - time - only special order for 1,000 units. All cost  relationships remain the same except for an additional one - time setup charge of $40,000. No additional design, marketing,  or distribution costs will be incurred. What is the minimum acceptable bid per unit on this one - time - only special order?   Answer:  
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a. Direct materials $100.00 Direct  manufacturing labor  ($12  ×  5,000)/15,000 4.00 Variable  manufacturing  ($150,000/15,000) 10.00 Fixed  manufacturing  ($300,000/15,000) 2.00
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