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frutty [35]
3 years ago
9

Crane Company incurred the following costs for 88000 units: Variable costs $528000 Fixed costs 392000 Crane has received a speci

al order from a foreign company for 3000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $2400 for shipping. If Crane wants to break even on the order, what should the unit sales price be?
Business
1 answer:
Anton [14]3 years ago
7 0

Answer:

The minimum price is $6.8

Explanation:

Giving the following information:

Crane Company incurred the following costs for 88000 units: Variable costs $528000 Fixed costs 392000 Crane has received a special order from a foreign company for 3000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $2400 for shipping.

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

Unitary cost= (528,000/88,000) + (2,400/3,000)= $6.8 per unit

The minimum price is $6.8

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