question archive Holmsbu Manufacturing has the following expected cost structure per unit for 2021: Type of Product 1 cost Raw materials Variable 1,000 650 Direct labor cost Variable Indirect logistics cost Fixed Indirect manufacturing cost Fixed Indirect sales/admin cost Fixed Total cost Price ? The above information has been calculated based on an expected quantity sold of 150,000 units

Holmsbu Manufacturing has the following expected cost structure per unit for 2021: Type of Product 1 cost Raw materials Variable 1,000 650 Direct labor cost Variable Indirect logistics cost Fixed Indirect manufacturing cost Fixed Indirect sales/admin cost Fixed Total cost Price ? The above information has been calculated based on an expected quantity sold of 150,000 units

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Holmsbu Manufacturing has the following expected cost structure per unit for 2021: Type of Product 1 cost Raw materials Variable 1,000 650 Direct labor cost Variable Indirect logistics cost Fixed Indirect manufacturing cost Fixed Indirect sales/admin cost Fixed Total cost Price ? The above information has been calculated based on an expected quantity sold of 150,000 units. In order for Holmsbu to reach their desired contribution margin rate of 50%, what must the sales price be per unit? You are given information that the indirect allocation rate in the logistics department is 10% of direct material usage and in the manufacturing department, it is 40% based on direct labor cost. The admin/sales department has a total budgeted cost for 2021 of 15 million, and has decided to use the total manufacturing cost (i.e. all costs excluding sales/admin) as the basis for the allocation of the 15 million. Work out the unit cost for Holmsbu's product. Holmsbu has recently been experiencing problems in relation to sales of their product. A customer has approached Holmsbu and wishes to purchase 50,000 units of the product for a price of 2,000 per unit. What should Holmsbu do? Explain why.

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