Reggie Corporation Manufactures a Single Product with the Following Unit

question 40

Multiple Choice

Reggie Corporation manufactures a single product with the following unit costs for 1,000 units: Recently, a company approached Reggie Corporation about buying 100 units for $5,100 each.Currently, the models are sold to dealers for $7,800.Reggie Corporation's capacity is sufficient to produce the extra 100 units.No additional selling expenses would be incurred on the special order.
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If Reggie Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?

• A) $4,014
• B) $4,164
• C) $5,100
• D) $6,900

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Definitions:

Note Payable

A written promise to pay a specified amount of money, usually with interest, by a certain date.

Sale of Equipment

A financial transaction involving the disposal of equipment assets in exchange for cash or other compensation.

Note Receivable

A written promise for amounts to be received by a business, typically including interest, from another party.