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?

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