Answer the Following Questions Using the Information Below:
Ozfone Manufactures

question 130

Multiple Choice

Answer the following questions using the information below:
Ozfone manufactures high-tech mobile phones.Ozfone has a policy of adding a 30% mark-up to full costs and currently has excess capacity.The following information pertains to the company's normal operations per month:
$$\begin{array} { l r l } \text { Output units } & 20000 \text { phones } \\\text { Machine-hours } & 8000 \text { hours } \\\text { Direct manufacturing labour-hours } & 5000 \text { hours } \\& \\\text { Direct materials per unit } & \$ 25 \\\text { Direct manufacturing labour per hour } & \$ 20 \\\text { Variable manufacturing overhead costs } & \$ 175000 \\\text { Fixed manufacturing overhead costs } & \$ 425000 \\\text { Product and process design costs } & \$ 400000 \\\text { Marketing and distribution costs } & \$ 475000\end{array}$$
-Ozfone is approached by an overseas customer to fulfil a one-time-only special order for 1000 units.All cost relationships remain the same except for a one-time set-up charge of $15 000.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)$92.50
• B)$180.00
• C)$53.75
• D)$234.00

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Definitions:

Opponent-process Theory

A psychological and physiological model that explains how humans perceive colors as the result of complex interactions between various neurons that process color in an antagonistic manner.

Somesthetic Senses

A group of senses that includes the sensations of touch, temperature, body position, and pain, originating from muscles, joints, skin, and other internal receptors.

Olfactory Receptor

Specialized cell or neuron responsible for detecting odors, situated in the nasal epithelium.

Throat

The anterior part of the neck, fronting the vertebral column, consisting of the pharynx and larynx, and containing the vocal cords and the passages for air and food.