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

Question

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

Quizplus · Accepted Answer

The minimum acceptable bid per unit should cover the variable costs per unit plus any additional costs specific to the order, divided by the number of units. Since no specific costs are provided, the one-time set-up charge of $15,000 must be spread across the 1000 units, adding $15 per unit to the variable cost. Without knowing the original variable cost, we can't calculate the exact bid, but the choice that represents a specific cost calculation including a one-time charge spread over units is the correct approach. Choice C seems to reflect a calculation that could align with adding a specific amount to a base cost, although without the exact variable costs, this is speculative. However, since the question asks for the minimum acceptable bid and only one option can be correct based on the information given, we infer that this option best fits the criteria described.

Answer the Following Questions Using the Information Below: Ozfone Manufactures

Answer the Following Questions Using the Information Below:
Ozfone Manufactures