Zildjian Corporation Manufactures a Single Product with the Following Unit

question 112

Multiple Choice

Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: $$\begin{array} { l r } \text { Direct materials } & \$ 2,300 \\\text { Direct labor } & 960 \\\text { Factory overhead } ( 30 \% \text { variable } ) & 1,800 \\\text { Selling expenses ( } 50 \% \text { variable) } & 900 \\\text { Admini strative expenses (10\% variable) } & 840 \\\text { Total per unit } & \$ 6,800\end{array}$$ Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order.
If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?

• A)$4,064
• B)$4,514
• C)$5,100
• D)$6,900

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Definitions:

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An approach or attitude characterized by inactivity or the decision not to actively influence or change events, typically in the context of therapy or conflict resolution.

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The act of sharing personal, private, or sensitive information about oneself with others.

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The ability or tendency to express one's feelings and emotions openly or effectively.

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A close and harmonious relationship in which the people or groups concerned understand each other's feelings or ideas and communicate well.