Hobbs Electronics makes and sells portable DVD players.Each DVD player has a selling price of $100.The following cost data per DVD player is based on a capacity of 5,000 DVD players per period. $$\begin{array} { l r }
\text { Direct Material } & \$ 30 \
\text { Direct Labor } & \$ 20 \
\text { Manufacturing Overhead } \
\text { (70\% variable; } 30 \% \text { fixed) } & \$ 10
\end{array}$$ Hobbs receives a special order for 100 DVD players.The only additional costs Hobbs will incur are $2 shipping charges per item.Hobbs has sufficient idle capacity to produce the additional DVD players.What is the minimum price Hobbs should charge per DVD player for the special order?
A)$60
B)$59
C)$57
D)$55
E)$62

Question

Hobbs Electronics makes and sells portable DVD players.Each DVD player has a selling price of $100.The following cost data per DVD player is based on a capacity of 5,000 DVD players per period. $$\begin{array} { l r } 
\text { Direct Material } & \$ 30 \
\text { Direct Labor } & \$ 20 \
\text { Manufacturing Overhead } \
\text { (70\% variable; } 30 \% \text { fixed) } & \$ 10
\end{array}$$ Hobbs receives a special order for 100 DVD players.The only additional costs Hobbs will incur are $2 shipping charges per item.Hobbs has sufficient idle capacity to produce the additional DVD players.What is the minimum price Hobbs should charge per DVD player for the special order?
A)$60
B)$59
C)$57
D)$55
E)$62

Quizplus · Accepted Answer

The Answer of Hobbs Electronics makes and sells portable DVD players.Each DVD player has a selling price of $100.The following cost data per DVD player is based on a capacity of 5,000 DVD players per period. $$\begin{array} { l r } 
\text { Direct Material } & \$ 30 \
\text { Direct Labor } & \$ 20 \
\text { Manufacturing Overhead } \
\text { (70\% variable; } 30 \% \text { fixed) } & \$ 10
\end{array}$$ Hobbs receives a special order for 100 DVD players.The only additional costs Hobbs will incur are $2 shipping charges per item.Hobbs has sufficient idle capacity to produce the additional DVD players.What is the minimum price Hobbs should charge per DVD player for the special order?
A)$60
B)$59
C)$57
D)$55
E)$62

Hobbs Electronics Makes and Sells Portable DVD Players Hobbs Receives a Special Order for 100 DVD Players