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

---

Definitions:

Congenital Heart Defects

Birth defects that affect the structure and function of the heart, present at birth.

Adolescents

Individuals in the transitional stage of development between childhood and adulthood, typically ranging from ages 13 to 19.

Strokes

A medical condition characterized by the sudden death of brain cells due to lack of oxygen, caused by blockage or rupture of blood vessels in the brain.

Blood Clots

Formed clumps of blood that can be beneficial in stopping bleeding but may cause health issues if they block blood flow to vital organs.