Your company has received an order for 30 units of a product. The labor cost to produce the item is $15.00 per hour. The setup cost for the item is $200 and material costs are $50 per unit. The item is sold for $92. The learning rate is 80 percent. Overhead are charged at a rate of 65 percent of unit labor cost.
A) Determine the average unit cost for the 30 units if the first unit takes six hours.
B) Should you company take this order? Why or why not?
C) Determine the minimum number of units that need to be made before the selling price meets or exceeds the average unit cost.