American Graduate University Operations And Supply Chain Management Assignment Help - Preston Wade

Question - Preston W ade, a local craftsman, normally sells his handcrafted wooden birdhouses for $88 each.
Preston has the capacity to produce as many as 50 birdhouses a week. In a normal week, Preston
makes 20 birdhouses with the following costs per unit:

Direct materials
$ 5.00
Direct labor
$20.00
Variable overhead
$ 4.00
Fixed overhead
$ 2.00
Refer to the Preston Wade information above. Preston has received a special order from a local plant
nursery for 25 birdhouses. The nursery wishes to have the birdhouses engraved with their own logo,
therefore, the order would require the rental of a special engraving tool at a cost of $200. Preston
requires a minimum $2,000 profit on any special order.
The minimum price per birdhouse that Pr ...Read More eston should charge the nursery is:
Answer
a. $80
b. $89
c. $117
d. $119 ...Read Less

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