Answer the Following Questions Using the Information Below:
Welch Manufacturing

question 89

Multiple Choice

Answer the following questions using the information below:
Welch Manufacturing is approached by a European customer to fulfil a one-time-only special order for a product similar to one offered to domestic customers.Welch Manufacturing has excess capacity.The following per unit data apply for sales to regular customers:
$$\begin{array} { l r } \text { Variable costs: } & \\\quad \text { Direct materials } & \$ 40 \\\quad \text { Direct labour } & 20 \\\text { Manufacturing support } & 35 \\\quad \text { Marketing costs } & 15 \\\text { Fixed costs: } & \\\quad \text { Manufacturing support } & 45 \\\quad \text { Marketing costs } & 15 \\\text { Total costs } & 170 \\\text { Mark-up (50\%) } & \underline { 85 } \\\text { Targeted selling price } & \$ 255\end{array}$$
-What is the contribution margin per unit?

• A)$255
• B)$85
• C)$145
• D)$110

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Definitions:

Scientific Management

A management theory focusing on improving economic efficiency and labor productivity through systematic study and analysis of work processes.

Time And Motion Studies

Analytical techniques used to evaluate the efficiency of a worker's performance by breaking down tasks into their components.

Fordism

denotes a system of industrial production characterized by mass production and high wages, standardized products, and assembly-line methods, originating from Henry Ford's practices.

Total Quality Management

A comprehensive management approach focusing on continuous improvement in all aspects of a business, aiming to ensure high quality in products or services.