A Company Is Currently Operating at 65% Capacity Producing 12,000

question 9

Essay

A company is currently operating at 65% capacity producing 12,000 units.Cost information relating to this current production is shown in the following table:
$$\begin{array} { | l | r | } \hline & \text { Per Unit } \\\hline \text { Sales price } & \$ 6 \\\hline \text { Direct material } & \$ 2.30 \\\hline \text { Direct labor } & \$ 0.87 \\\hline \begin{array} { l } \text { Variable } \\\text { overhead }\end{array} & \$ 0.91 \\\hline \text { Fixed overhead } & \$ 0.70 \\\hline\end{array}$$
The company has been approached by a customer with a request for a special order for 2,000 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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Definitions:

Decision

A choice made after consideration of options and consequences in order to resolve a problem or achieve an outcome.

TRIP

A framework in conflict studies standing for Topic, Relational, Identity, and Process issues.

Process Conflict

Disagreement over the methods or procedures to achieve goals or complete tasks, often related to workflows or responsibilities.

Public Meetings

Gatherings that are open to the general public where community members can discuss various topics, share opinions, and receive information from leaders or officials.