$ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 10.00 2.80 5.00 1.70 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 $26.30 $24.60 $24.80 O O O
$ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 10.00 2.80 5.00 1.70 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 $26.30 $24.60 $24.80 O O O
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Fixed manufacturing overhead
Variable selling expenses
2.80
5.00
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
$26.30
$24.60
$24.80
$23.80
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