Berryman Products is approached by an overseas customer to fulfill a one-time-only special order for 2,000 units

ACCOUNTING

Multiple Choice

Berryman Products manufactures coffee tables. Berryman 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 units 30,000 tables

Machine-hours 8,000 hours

Direct manufacturing labor-hours 10,000 hours



Direct materials per unit $50

Direct manufacturing labor per hour $6

Variable manufacturing overhead costs $161,250

Fixed manufacturing overhead costs $600,000

Product and process design costs $450,000

Marketing and distribution costs $562,500



Berryman Products is approached by an overseas customer to fulfill a one-time-only special order for 2,000 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. $67.38

b. $77.38

c. $111.13

d. $80.85

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