Quick Connect manufactures high-tech cell phones.Quick Connect has a policy of adding a 25% markup...
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Quick Connect manufactures high-tech cell phones.Quick Connect has a policy of adding a 25% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month:
Output units 1,500 phones
Machine-hours 1,100 hours
Direct manufacturing labor-hours 1,200 hours
Direct materials per unit $23
Direct manufacturing labor per hour $9
Variable manufacturing overhead costs $214,500
Fixed manufacturing overhead costs $126,700
Product and process design costs $143,400
Marketing and distribution costs $154,045
Quick Connect Products is approached by an overseas customer to fulfill a one-time-only special order for 150 units. All cost relationships remain the same except for a one-time setup charge of $2,025. 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. $188.50
B. $173.20.
C. $30.20
D. $186.70 [correct answer]
I know that D. is the correct answer, but I don't know how to get there. Please explain? Thank you!
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