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kodGreya [7K]
3 years ago
13

Farnsworth Television makes and sells portable television sets.Each television regularly sells for $200. The following cost data

per television are based on a full capacity of 12,000 televisions produced each period:* Direct materials = $75* Direct labor = $55* Manufacturing overhead (75% variable and 25% unavoidable fixed) $48Farnsworth has received a special order for a sale of 2,500 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $10 per television for shipping.Farnsworth is now selling 7,200 televisions through regular distributors each period.What should be the minimum selling price per television in negotiating a price for this special order?
1) $2002) $1663) $1784) $176
Business
1 answer:
Naddika [18.5K]3 years ago
8 0

Answer:

The correct answer is $176.

Explanation:

Giving the following information:

The following cost data per television are based on full capacity of 12,000 televisions produced each period:* Direct materials = $75* Direct labor = $55* Manufacturing overhead (75% variable and 25% unavoidable fixed) $48.

The only selling costs that would be incurred on this order would be $10 per television for shipping.

Because it is a special offer and there is unused capacity we will not have into account the fixed costs.

Unitary costs= 75 + 55 + (48*0.75) + 10= $176

The minimum price is the one that covers the variable cost. In this case $176.

Minimum price= $176

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