Question:The Clear Music Company produces and sells adesktop speaker for $270.The company has the capacity to produce 67,000speakers each period.At capacity, the costs assigned to each unit are asfollows:Unit level costs$130Product level costs $32Facility level costs $22The company has received a special order for18,000 speakers.If this order is accepted, the company will have tospend $27,000 on additional costs.Assuming that no sales to regular customers willbe lost if the order is accepted, at what selling pricewill the company be indifferent between acceptingand rejecting the special order? (Do not roundintermediate calculations. Round final answer totwo decimal places)

Step 1: Define Differential or Incremental Analysis for Determining Price of Special Order:A firm…

Answered: Question: The Clear Music Company…

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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Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: Direct material:14 Direct labor:20 Manufacturing overhead:3 Total:37 A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $3 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?

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