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

question 89

Multiple Choice

Tenna Electronics sells arc monitors for $55 per unit.Unit product costs are as follows: $$\begin{array} { l r } \text { Direct materials } & \$ 14 \\\text { Direct labor } & 20 \\\text { Manufacturing overhead } & 3 \\\text { Total } & \$ 37\end{array}$$ 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

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