A Company Is Currently Operating at 60% Capacity Producing 10,000

question 146

Essay

A company is currently operating at 60% capacity producing 10,000 units.Cost information relating to this current production is shown in the following table:
$$\begin{array} { | l | r | } \hline & \text { Per Urit } \\\hline \text { Sales price } & \$ 21 \\\hline \text { Direct rraterial } & \$ 6 \\\hline \text { Direct labor } & \$ 4.12 \\\hline \begin{array} { l } \text { Variable } \\\text { overhead }\end{array} & \$ 2.23 \\\hline \text { Fixed overhead } & \$ 0.80 \\\hline\end{array}$$ The company has been approached by a customer with a request for a special order for 5,000 units.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?

---

Definitions:

Community Counseling

A form of counseling that focuses on the needs and issues of a community as a whole, offering support and intervention on a broader scale.

Preventative Education

Education aimed at preventing problems before they occur, focusing on equipping individuals with the knowledge and tools they need to avoid potential issues.

Direct Community Services

Constitutes the provision of assistance and resources directly to individuals within a community to meet their needs.

AIDS Awareness/Prevention

Educational efforts focused on increasing understanding of HIV/AIDS and promoting behaviors to prevent the spread of the virus.