GNB 13e Solutions Ch 13 Case

GNB 13e Solutions Ch 13 Case - C13-28 Wesco, Inc. 1....

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1. Minimum Bid Price for Zwinger Order Assume: Special order accepted BENEFITS Rate Volume Amount Revenue from Zwinger $1.16 20,000 $23,200 COSTS Direct materials: AG-5 $1.20 2,500 $3,000 (Given, [300 x 20 = 6,000] - 3,500 BH-3) BH-3 (salvage) Salvage 3,500 $600 (Given, 3,500 BH-3 available) KL-2 $1.05 4,000 $4,200 (Given, [200 x 20 = 4,000]) CW-7 $1.35 3,000 $4,050 (Given, [150 x 20 = 3,000]) DF-6 $0.70 500 $350 (Given, [175 x 20 = 3,500] - 3,000 DF-6 on hand) DF-6 (salvage) $0.60 3,000 $1,800 ($0.70-$0.10, 3,000 DF-6 available) Total direct materials cost $14,000 Direct labor: Regular time $14.00 400 $5,600 (Available capacity) Overtime $21.00 100 $2,100 ([20 x 25 = 500 DLH] - 400 available) Total direct labor cost $7,700 Variable overhead: Total variable overhead cost $3.00 500 $1,500 (Above) Total relevant costs $23,200 NET GAIN (LOSS) $- Recommend: Wesco should bid a minimum of $23,200 or $1.16 per pound for the 20,000 pound order. Dennis
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GNB 13e Solutions Ch 13 Case - C13-28 Wesco, Inc. 1....

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