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Question
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:
| Per Unit | |
| Sales price | $6 |
| Direct material | $2.30 |
| Direct labor | $0.87 |
| Variable overhead | $0.91 |
| Fixed overhead | $0.70 |
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?
Answer
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Q:
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