Homework answers / question archive / Neal Manufacturing Inc

Neal Manufacturing Inc

Accounting

Share With

Neal Manufacturing Inc. has been approached by a customer who wants to place a one-time order for a component similar to one that they make for another customer. Existing sales will not be affected by acceptance of this order. The manufacturing costs and fif the targeted selling price for the component currently being made are below. The direct materials used in the new component for the if new customer would cost $.50 more than those in the component currently being made. The variable sel[pg expenses would be $1.25 per unit. What is the minimum unit price at which Neal Manufacturing would be willing to accept the special order? 
Please complete and upload your work in an excel spreadsheet. Show all work. 
Direct materials 2.70

Direct labor 4.40

Varialbe manufacturing overhead (75% of direct labor cost) 3.30

Fixed manufacturing overhead (150% of direct labor cost) 6.60

Total manufacturing cost 17

Markup (55% of full manufacturing cost) 9.35

Targeted selling price 26.35