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Question: An executive from a large merchandising firm has called your vice-president forproduction to get a price quote for an additional 100 units of a given product. Thevice-president has asked you to prepare a cost estimate. The number of hours requiredto produce a unit is 5. The average labor rate is $12 per hour. The materialscost $14 per unit. Overhead for an additional 100 units is estimated at 50% of thedirect labor cost. If the company wants to have a 30% profit margin, what should be the unit price to quote?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92571756

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