Answer the Following Questions Using the Information Below:
Ozfone Manufactures

Answer the following questions using the information below:
Ozfone manufactures high-tech mobile phones.Ozfone has a policy of adding a 30% mark-up to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month:
$$\begin{array} { l r l } \text { Output units } & 20000 \text { phones } \\\text { Machine-hours } & 8000 \text { hours } \\\text { Direct manufacturing labour-hours } & 5000 \text { hours } \\& \\\text { Direct materials per unit } & \$ 25 \\\text { Direct manufacturing labour per hour } & \$ 20 \\\text { Variable manufacturing overhead costs } & \$ 175000 \\\text { Fixed manufacturing overhead costs } & \$ 425000 \\\text { Product and process design costs } & \$ 400000 \\\text { Marketing and distribution costs } & \$ 475000\end{array}$$
-Ozfone is approached by an overseas customer to fulfil a one-time-only special order for 1000 units.All cost relationships remain the same except for a one-time set-up charge of $15 000.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?

A) $92.50
B) $180.00
C) $53.75
D) $234.00

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free