Answer:
the minimum acceptable price of this special order is $410.
Explanation:
Minimum acceptable price for the special order is the price that gives a Incremental<em> contribution margin of zero</em> or <em>a price that covers all costs related to supporting the special offer</em>.
Since the company has <em>excess capacity</em>, ignore the fixed costs as these are irrelevant for this decision
Costs to Provide for the Special Offer : Minimum acceptable price
Direct materials $150
Direct labor $60
Manufacturing support $105
Marketing costs $95
Minimum acceptable price $410
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
The inability of sole proprietors to provide fringe benefits to their employees can affect the service rendered to customers. Without fringe benefits, the employer will not be able to attract quality applicants for his business. He may have to settle for less qualified staff who may not be able to provide clients with excellent service.
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