Kitchens Sales Inc.is approached by Mr.Louis Cifer,a new customer,to fulfill a large one-time-only special order for a product similar to one offered to regular customers.The following per unit data apply for sales to regular customers:
Kitchens Sales inc.has excess capacity.Mr.Cifer wants the cabinets in cherry rather than oak,so direct material costs will increase by $65 per unit.The average marketing cost of Kitchens Sales product is $175 per order.Which of the following costs is NOT considered to calculate the minimum acceptable price of a one-time-only special order?
Definitions:
Manufacturing Cost Elements
The components of manufacturing costs, typically including direct materials, direct labor, and manufacturing overhead.
Packaging Department
The division in a manufacturing firm responsible for packaging products for storage or shipment.
Baking Department
A specific department within a food manufacturing or retail business that is responsible for producing baked goods.
Process Cost Systems
Accounting methods used in industries where similar products are produced in a continuous process, allocating costs proportionally across all units produced.
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