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Question
A company is currently operating at 80% capacity producing 5,000 units. Current cost information relating to this production is shown in the table below:Per Unit
Sales price $34
Direct material $2
Direct labor $3
Variable overhead $4
Fixed overhead $5
The company has been approached by a customer with a request for a 100-unit special order. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?
A. Any amount over $34 per unit.
B. Any amount over $20 per unit.
C. Any amount over $14 per unit.
D. Any amount over $9 per unit.
E. Any amount over $5 per unit.
Answer
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