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Question: 8 problem 110ppartunity costs h schaefer cnn product rosebo...

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8 Problem 110ppartunity Costs (H. Schaefer)( Cnn product, Rosebo. Manyfacturingucosts per unit for Rosebo follow: orp. is working at full production capacity producing 10,000 units of a unique 20 Direct materials Direct manufacturing lab Manufacturing overhead The unit manufacturing overhead cost is based on a variable cost per unit of $2 and fixed costs of $30,000 (at full capacity of 10,000 units). The nonmanufacturtng costs, all variable, are $4 per unit, and the selling price is $20 per unit. A customer, the Miami Co., has asked Wolverine to produce 2,000 units of a modification of Rosebo to be called Orangebo. Orangebo would require the same manufacturing processes as Rosebo, and the Miami Co. has offered to share equally the nonmanufacturing costs with Wolverine. Orangebo will sell at $15 per unit. Required 1. What is the opportunity cost to Wolverine of producing the 2,000 units of Orangebo? brre.ML 2. The Buckeye Corp. has offered to produce 2,000 units of Ros r Wolverine so that Wolverine may accept the Orangebo offer. Buckeye would chargd Wolverine $14 per unit for the Rosebo. Should Wolverine accept the Buckeye offer? (Show your calculations) wnmun 3. Suppose Wolverine had been working at less than full capacity, producing 8,000 units of Rosebo at the time the Orangebo offer was made, What is the mjnimum price Wolverine should S accept for Orangebo under these conditions?
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