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julsineya [31]
3 years ago
8

The company has been approached by a customer with a request for a 100-unit special order. What is the minimum per unit sales pr

ice that management would accept for this order if the company wishes to increase current profits
Business
1 answer:
Marrrta [24]3 years ago
7 0

The company should fix the price per unit as <u>$9 </u>to increase current profits.

<u>Explanation</u>:

<em><u>Given:</u></em>

Sales price= $34

Direct materials= $2

Direct labor= $3

Variable overhead= $4

Fixed overhead= $5

The company is capable of producing 5000 units with 80% operating capacity.

5000/0.80-5000=1250 units

Incremental cost= $2+$3+$4

                             = $9

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