Question : 23) What the full cost of the product per unit : 1211820

23) What is the full cost of the product per unit for Gracius Manufacturing?

A) $40

B) $70

C) $190

D) $209

24) Grounded Coffee Products manufactures coffee tables. Grounded Coffee Products has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company’s normal operations per month:

Output units20,000tables

Machine-hours8,000hours

Direct manufacturing labor-hours10,000hours

Direct materials per unit$105

Direct manufacturing labor per hour$10

Variable manufacturing overhead costs$322,500

Fixed manufacturing overhead costs$1,200,000

Product and process design costs$1,100,000

Marketing and distribution costs$1,125,000

Grounded Coffee Products is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $20,000. 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?              

A) $146.125

B) $1346.125

C) $126.125

D) $946.125

25) Quick Connect manufactures high-tech cell phones. Quick Connect has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company’s normal operations per month:

Output units1,250phones

Machine-hours750hours

Direct manufacturing labor-hours700hours

Direct materials per unit$20

Direct manufacturing labor per hour$8

Variable manufacturing overhead costs$175,000.00

Fixed manufacturing overhead costs$126,300

Product and process design costs$143,000

Marketing and distribution costs$153,645

Quick Connect Products is approached by an overseas customer to fulfill a one-time-only special order for 120 units. All cost relationships remain the same except for a one-time setup charge of $1,500. 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) $24.48

B) $160.48

C) $176.98

D) $200.00

26) Which of the following is explains the cost-plus approach to pricing decisions?

A) arriving at a price for the product based on the competitive pricing prevalent in the market

B) arriving at a price based on the perceived value to a customer given the cost of design and added features

C) arriving at a price based on the demand and supply trends in the market

D) arriving at a price that earns a specific return given the cost of the product

27) Cost allocation is not required to cost inventories for reporting to external parties.

28) Companies operating in markets that are not competitive favor cost-based approaches.

29) Cost allocation is necessary for accurate income measurement.

30) Two different approaches to pricing decisions are market based and cost based.

31) Long-run pricing is an operational decision and not a strategic decision as perceived by many.

32) In long-run pricing, costs include all manufacturing and non-manufacturing costs but exclude all future direct and indirect costs.