Question

Assume that each year a company normally produces and sells 80,000 units of its only product for $40 per unit. The company's average unit costs at this level of activity are given below: Direct materials $ 9.50 Direct labor 10.00 Variable manufacturing overhead 2.80 Fixed manufacturing overhead 5.00 Variable selling expenses 1.70 Fixed selling expenses 4.50 Total cost per unit $ 33.50 The company's relevant range of production is 70,000 - 100,000 units. It has an opportunity to sell 20,000 more units to new overseas customer. The import duties and foreign permits associated with the order would cost $16,000. However, the only selling cost associated with the order would be $1.50 per unit. What is the minimum price that the company could charge on this order and still break even with respect to this opportunity? Multiple Choice $21.60 $23.80 $26.30 $24.80

          Assume that each year a company normally produces and sells 80,000 units of its only product for $40 per unit. The company's average unit costs at this level of activity are given below:
Direct materials	$ 9.50
Direct labor	10.00
Variable manufacturing overhead	2.80
Fixed manufacturing overhead	5.00
Variable selling expenses	1.70
Fixed selling expenses	4.50
Total cost per unit	$ 33.50
The company's relevant range of production is 70,000 - 100,000 units. It has an opportunity to sell 20,000 more units to new overseas customer. The import duties and foreign permits associated with the order would cost $16,000. However, the only selling cost associated with the order would be $1.50 per unit. What is the minimum price that the company could charge on this order and still break even with respect to this opportunity?
Multiple Choice
$21.60
$23.80
$26.30
$24.80

Assume that each year a company normally produces and sells 80,000 units of its only product for 40 per unit. The company's average unit costs at this level of activity are given below:
Direct materials 9.50
Direct labor 10.00
Variable manufacturing overhead 2.80
Fixed manufacturing overhead 5.00
Variable selling expenses 1.70
Fixed selling expenses 4.50
Total cost per unit 33.50
The company's relevant range of production is 70,000 - 100,000 units. It has an opportunity to sell 20,000 more units to new overseas customer. The import duties and foreign permits associated with the order would cost16,000. However, the only selling cost associated with the order would be 1.50 per unit. What is the minimum price that the company could charge on this order and still break even with respect to this opportunity?
Multiple Choice21.60
23.8026.30
24.80

Added by Jason S.

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