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Special Order Bid Calculations

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Manufacturing support costs for products is predetermined at a rate of $60 per direct labor hour. An outlet has a bid in on a special order toy product. Estimates for the order include: Direct materials $40,000; direct labor 500 direct labor hours at $20 per hour; and a markup of 20%

1) Support cost estimates for this special order total - $10,000, $30,000, $36,000, or none of these

2) Estimated total product costs for this special order total - $50,000, $80,000, $96,000, or none of these

3) The bid price for this special order should be - $50,000, $60,000, $80,000, or none of these

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Solution Summary

This solution provides cost and bid price calculations for a bid.

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Part 1
Support cost estimates = $60/direct labor hour * 500 direct labor hours = $30,000.
Answer: $30,000.

Part 2
Total product costs = ...

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