Answer:
Sales price = $8.1
Explanation:
<em>The units sale price should be that that equated the total revenue to the the total relevant cost of the special order</em>
<em>The relevant cost of the special order includes;</em>
<em>1. Variable cost</em>
<em>2. Additional shipping cost </em>
<em>Note the fixed costs are irrelevant for this decision because they would be incurred either way</em>
Variable cost per unit = Total variable cost /Number of unit
= 420,000/70,000 units = $6 per unit
$
Total variable cost of special order
( 3,000× $6) = $18,000
Shipping cost <u> 6,300 </u>
Total relevant costs of special order. <u>24,300
</u>
Minimum Sales price = Total relevant cost /number of units
Sales price = $24,300/3,000 units =$8.1
Sales price = $8.1
