E Quiz: Quiz 5 (CH 10-12) Question 7 of 9 Data table The TigerCub Corporation is working at full production capacity pro

[answerhappygod]

E Quiz Quiz 5 Ch 10 12 Question 7 Of 9 Data Table The Tigercub Corporation Is Working At Full Production Capacity Pro 1 (225.77 KiB) Viewed 39 times

E Quiz: Quiz 5 (CH 10-12) Question 7 of 9 Data table The TigerCub Corporation is working at full production capacity producing 10,000 units of a unique product, Everlast. Manufacturing cost pe (Click the icon to view the cost per unit information.) Direct materials 10 A customer, the Apex Company, has asked TigerCub to produce 2,000 units of Stronglast, a modification of Everlast. Stronglast would requi of Stronglast plus half of the marketing cost per unit. 4 Read the requirements. Direct manufacturing labor Manufacturing overhead 15 $ 29 Total manufacturing cost Requirement 1. What is the opportunity cost to TigerCub of producing the 2,000 units of Stronglast? (Assume that no overtime is worked.) Determine the formula for calculating the opportunity cost, then calculate the opportunity cost of producing the 2,000 units of Stronglast. Selling price per unit Total variable cost per unit )x Units = Opportunity cost Manufacturing overhead cost per unit is based on variable cost per unit of $8 and fixed costs of $70,000 (at full capacity of 10,000 units). Marketing cost per unit, all variable, is $2, and the selling price is $58. 58 25 2000 = 66000 Print Done Requirement 2. The Chesapeake Corporation has offered to produce 2,000 units of Everlast for TigerCub so that TigerCub may accept the units of Everlast and 2,000 units of Stronglast and purchase 2,000 units of Everlast from Chesapeake. Chesapeake would charge TigerCub TigerCub accept the Apex offer? Show your calculations. TigerCub is considering manufacturing 8,000 units of Everlast and 2,000 units of Stronglast and purchasing 2,000 units of Everlast from Chesapeake. Chesapeake would charge TigerCub $50 per unit to manufacture Everlast. Begin by completing the following table for manufactured Stronglast units and purchased Everlast units. Manufacture Stronglast Purchase Everlast Total Selling price per unit Total fixed costs Contribution margin per unit Contribution margin from selling 2,000 units On the basis of financial considerations alone, TigerCub should accept the Chesapeake offer. Requirement 3. Suppose TigerCub had been working at less than full capacity, producing 8,000 units of Everlast, at the time the Apex offer was made. Calculate the minimum price TigerCub should accept for Stronglast under these conditions. (Ignore the previous $52 selling price.) S