Country Classics makes ceramic lamps that are normally sold for $12.50 each. The variable manufacturing costs are $4.50 per unit while the fixed manufacturing costs are $1.50 per unit. As well, sales staff earn a 10% on all sales. Recently Country Classics received a special order to provide 1,000 lamps. Country Classics has sufficient capacity to meet this order. What price should Country Classics charge if it wants to breakeven on the order? Select answer from the options below $4.95 $4.50 $5.00 $6.67

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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Country Classics makes ceramic lamps that are normally sold for $12.50 each. The variable manufacturing costs are $4.50 per unit while the fixed manufacturing costs are $1.50 per
unit. As well, sales staff earn a 10% on all sales. Recently Country Classics received a special order to provide 1,000 lamps. Country Classics has sufficient capacity to meet this order.
What price should Country Classics charge if it wants to breakeven on the order? Select answer from the options below $4.95 $4.50 $5.00 $6.67
Transcribed Image Text:Country Classics makes ceramic lamps that are normally sold for $12.50 each. The variable manufacturing costs are $4.50 per unit while the fixed manufacturing costs are $1.50 per unit. As well, sales staff earn a 10% on all sales. Recently Country Classics received a special order to provide 1,000 lamps. Country Classics has sufficient capacity to meet this order. What price should Country Classics charge if it wants to breakeven on the order? Select answer from the options below $4.95 $4.50 $5.00 $6.67
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