Answered: Marquette has an opportunity to sell…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 4CMA: Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold...

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Marquette has an opportunity to sell its product through an online retailer. To begin selling through this online platform, they are required to ship 2,000 units to the retailers’ order fulfillment warehouse. The other condition of this offer is that they pay a one-time vendor marketing fee of $5,000. To get the units to the fulfillment warehouse by the deadline Marquette will need to pay for expedited shipping at a cost of $10 per unit. What is the minimum price Marquette should charge the retailer for this initial order of 2,000 units? (Show all supporting calculations).

(NOTE: ignore taxes or other costs not specifically mentioned in the questions.)

Marquette Manufacturing produces "invisible" electric dog fences, sold through retail locations nationwide. The
selling price of the fence is $150 per unit. The cost to manufacture and market the fences is shown below.
These figures represent the cost at the company's normal volume of 3,000 units per month.
Unit Manufacturing Costs
Variable materials $ 15.00
Variable labor
$ 17.50
Variable overhead $ 12.50
Fixed overhead
$ 16.00
Total unit manufacturing costs
$ 61.00
Unit Marketing Costs
Variable
$
12.00
Fixed overhead
$
17.00
Total unit marketing costs
2$
29.00
Total unit costs
$ 90.00

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