1. Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $130 Direct labor 110 Manufacturing support 125 Marketing costs 65 Fixed costs: Manufacturing support 175 Marketing costs 85 Total costs 690 Markup (50%) 345 Targeted selling price $1,035 What is the full cost of the product per unit

Question

Business

Roselyn Chen

19 March, 15:52

1. Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $130 Direct labor 110 Manufacturing support 125 Marketing costs 65 Fixed costs: Manufacturing support 175 Marketing costs 85 Total costs 690 Markup (50%) 345 Targeted selling price $1,035 What is the full cost of the product per unit

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Yandel Graves · Answer 1

Full cost per unit = $690

Explanation:

The full cost of a product is the sum of its variable cost per unit and its fixed cost per unit. Costing a product at its full cost ensures that all costs are recovered both variable cost and fixed cost

The full cost for Crandle's product would be:

$

Material 130

Labour 110

Manufacturing 125

Market 65

Variable cost 430

Fixed cost

Manufacturing 175

Marketing 85

Full cost per unit 690

Full cost per unit = $690