Farnsworth Television makes and sells portable television sets. Each television regularly sells for $330. The following cost data per television is based on a full capacity of 18,500 televisions produced each period: Direct materials Direct labor $90 $70 Manufacturing overhead (70% variable, 30% unavoidable fixed) $50 A special order has been received by Farnsworth for a sale of 3,200 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $11 per television for shipping. Farnsworth is now selling 8,200 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order? A. $206 B. $210 C. $330 D. $195

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter23: Evaluating Variances From Standard Costs
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Farnsworth Television makes and sells portable television sets. Each television
regularly sells for $330. The following cost data per television is based on a full capacity
of 18,500 televisions produced each period:
Direct materials
Direct labor
$90
$70
Manufacturing overhead (70% variable, 30% unavoidable fixed) $50
A special order has been received by Farnsworth for a sale of 3,200 televisions to an
overseas customer. The only selling costs that would be incurred on this order would
be $11 per television for shipping. Farnsworth is now selling 8,200 televisions through
regular distributors each period. What should be the minimum selling price per
television in negotiating a price for this special order?
A. $206
B. $210
C. $330
D. $195
Transcribed Image Text:Farnsworth Television makes and sells portable television sets. Each television regularly sells for $330. The following cost data per television is based on a full capacity of 18,500 televisions produced each period: Direct materials Direct labor $90 $70 Manufacturing overhead (70% variable, 30% unavoidable fixed) $50 A special order has been received by Farnsworth for a sale of 3,200 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $11 per television for shipping. Farnsworth is now selling 8,200 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order? A. $206 B. $210 C. $330 D. $195
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