Output Units Machine - Hours Direct Manufacturing Labour Hours Direct Manufacturing Labour Per Hour Direct Materials per unit Variable Manufacturing overhead costs - total Fixed Manufacturing overhead costs - total Product and process design costs - total Marking and distribution costs - total 15,000 boards 4,000 hours 5,000 hours $12 $100 $150,000 $300,000 $200,000 $250,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bluebird Company manufactures basketball backboards. The following information pertains to
the company's normal operations per month:
Output Units
Machine - Hours
Direct Manufacturing Labour Hours
Direct Manufacturing Labour Per Hour
Direct Materials per unit
Variable Manufacturing overhead costs - total
Fixed Manufacturing overhead costs - total
Product and process design costs - total
Marking and distribution costs - total
15,000 boards
4,000 hours
5,000 hours
$12
$100
$150,000
$300,000
$200,000
$250,000
Required: (show all your calculations for full marks)
A. For long-run pricing, what is the full-cost base per unit?
B. Bluebird Company is approached by an overseas city to fulfill a one-time-only special
order for 1,000 units. All cost relationships remain the same except for an additional
one-time setup charge of $40,000. 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?
Transcribed Image Text:Bluebird Company manufactures basketball backboards. The following information pertains to the company's normal operations per month: Output Units Machine - Hours Direct Manufacturing Labour Hours Direct Manufacturing Labour Per Hour Direct Materials per unit Variable Manufacturing overhead costs - total Fixed Manufacturing overhead costs - total Product and process design costs - total Marking and distribution costs - total 15,000 boards 4,000 hours 5,000 hours $12 $100 $150,000 $300,000 $200,000 $250,000 Required: (show all your calculations for full marks) A. For long-run pricing, what is the full-cost base per unit? B. Bluebird Company is approached by an overseas city to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for an additional one-time setup charge of $40,000. 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?
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