Quick Connect manufactures high-tech cell phones.Quick Connect has a policy of adding a 20% markup to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month: $\begin{array}{lr}
\text { Output units } & 1,250 \text { phones } \
\text { Machine-hours } & 750 \text { hours } \
\text { Direct manufacturing labor-hours } & 700 \text { hours }\\
\text { Direct materials per unit } & \$ 20 \
\text { Direct manufacturing labor per hour } & \$ 8 \
\text { Variable manufacturing overhead costs } & \$ 175,000,00 \
\text { Fixed manufacturing overhead costs } & \$ 126,300 \
\text { Product and process design costs } & \$ 143,000 \
\text { Marketing and distribution costs } & \$ 153,645
\end{array}$ Quick Connect Products is approached by an overseas customer to fulfill a one-time-only special order for 120 units.All cost relationships remain the same except for a one-time setup charge of $1,500.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?
A) $24.48
B) $160.48
C) $176.98
D) $200.00

Question

Quizplus · Accepted Answer

The minimum acceptable bid per unit on this one-time-only special order is $176.98. This is calculated by adding the full costs of the order, which are $143,000, to the 20% markup, which is $28,600, and then dividing by the number of units in the order, which is 120.

Quick Connect Manufactures High-Tech Cell Phones Quick Connect Products Is Approached by an Overseas Customer to of Adding