Longball Company manufactures basketball backboards. The following information pertains to the company's normal operations per month:

Required:
a.For long-run pricing, what is the full-cost base per unit?
b.Longball 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?

Question

Longball Company manufactures basketball backboards. The following information pertains to the company's normal operations per month:
  
Required:
a.For long-run pricing, what is the full-cost base per unit?
b.Longball 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?

Quizplus · Accepted Answer

The Answer of Longball Company manufactures basketball backboards. The following information pertains to the company's normal operations per month:
  
Required:
a.For long-run pricing, what is the full-cost base per unit?
b.Longball 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?

Longball Company Manufactures Basketball Backboards