Pearson Industries has received a special order for 12,000 units of its product. The product normally sells for $35 and has the following manufacturing costs: Direct materials Direct labor Per unit $7 $6 Variable manufacturing overhead $4 Fixed manufacturing overhead $12 Unit cost $29 Assume that Pearson has sufficient capacity to fill the order. What price should Pearson charge to make a $12,000 incremental profit?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 7EB: Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has...
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Pearson Industries has received a special order for 12,000
units of its product. The product normally sells for $35
and has the following manufacturing costs:
Direct materials
Direct labor
Per unit
$7
$6
Variable manufacturing overhead $4
Fixed manufacturing overhead $12
Unit cost
$29
Assume that Pearson has sufficient capacity to fill the
order. What price should Pearson charge to make a
$12,000 incremental profit?
Transcribed Image Text:Pearson Industries has received a special order for 12,000 units of its product. The product normally sells for $35 and has the following manufacturing costs: Direct materials Direct labor Per unit $7 $6 Variable manufacturing overhead $4 Fixed manufacturing overhead $12 Unit cost $29 Assume that Pearson has sufficient capacity to fill the order. What price should Pearson charge to make a $12,000 incremental profit?
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