Tenna Electronics Sells Arc Monitors for $55 Per Unit A Special Order to Purchase 15,000 Arc Monitors Was Recently

question 59

Multiple Choice

Tenna Electronics sells arc monitors for $55 per unit. Unit product costs are as follows: $\begin{array}{lr}\text { Direct materials } & \$ 14 \\\text { Direct labor } & 20 \\\text { Manufacturing overhead } &3 \\\text { Total } & \$ 37\end{array}$ A special order to purchase 15,000 arc monitors was recently received from a customer. There is enough capacity to fill the order and filling this order would not disrupt current operations. Tenna will incur an additional $2 per arc monitor for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. In negotiating a price, how much is the minimum selling price that Tenna Electronics should accept for this special order?

• A) $34
• B) $39
• C) $38
• D) $36