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Answer the Following Questions Using the Information Below:
Grant's Cakes

Question 119

Multiple Choice

Answer the following questions using the information below:
Grant's Cakes is approached by Ms Tammy Wang,a new customer,to fulfil a large one-time-only special order for a product similar to one offered to regular customers.The following per unit data apply for sales to regular customers:
 Direct materials $455 Direct labour 300 Variable manufacturing support 45 Fixed manufacturing support 100 Total manufacturing costs 900 Mark-up (60%)  540 Targeted selling price $1440\begin{array} { l r } \text { Direct materials } & \$ 455 \\\text { Direct labour } & 300 \\\text { Variable manufacturing support } & 45 \\\text { Fixed manufacturing support } & 100 \\\text { Total manufacturing costs } & 900 \\\text { Mark-up (60\%) } & \underline { 540 } \\\text { Targeted selling price } & \$ 1440\end{array} Grant's Kitchens has excess capacity.Ms Wang wants layered cream cheese pound cakes rather than plain pound cakes,so direct material costs will increase by $30 per unit.
-If Ms Wang wanted a long-term commitment for supplying this product,this analysis:


A) would definitely be different.
B) would not be different.
C) may be different.
D) does not contain enough information to determine if there would be a difference.

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