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ABC is considering a special order for 20 gold bracelets for a wedding party. The usual selling price is $190 and the estimated unit cost is $88 in direct materials, $45 in direct labor, and $23 in overhead. The overhead is fixed except $4 per unit. Custom engraving for this order will add $2 in materials per bracelet and require rental of a specific machine for $200 (no other use). There would be no effect on other sales or customers. What is the minimum price per bracelet ABC can charge to break even for this special order?

ABC is considering a special order for 20 gold bracelets for a wedding party. The usual selling price is $190 and the estimated unit cost is $88 in direct materials, $45 in direct labor, and $23 in overhead. The overhead is fixed except $4 per unit. Custom engraving for this order will add $2 in materials per bracelet and require rental of a specific machine for $200 (no other use). There would be no effect on other sales or customers. What is the minimum price per bracelet ABC can charge to break even for this special order?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC is considering a special order for 20 gold bracelets for a wedding party. The usual selling price is $190 and the estimated unit cost is $88 in direct materials, $45 in direct labor, and $23 in overhead. The overhead is fixed except $4 per unit. Custom engraving for this order will add $2 in materials per bracelet and require rental of a specific machine for $200 (no other use). There would be no effect on other sales or customers. What is the minimum price per bracelet ABC can charge to break even for this special order?
Transcribed Image Text:ABC is considering a special order for 20 gold bracelets for a wedding party. The usual selling price is $190 and the estimated unit cost is $88 in direct materials, $45 in direct labor, and $23 in overhead. The overhead is fixed except $4 per unit. Custom engraving for this order will add $2 in materials per bracelet and require rental of a specific machine for $200 (no other use). There would be no effect on other sales or customers. What is the minimum price per bracelet ABC can charge to break even for this special order?
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