SOR-120 Inc. is a manufacturing company. It has received a special order for 11,000 units of its product TK-15. The normal selling price of one unit of TK-15 is $63 and its unit product cost is $20 as shown below Direct materials Direct labor Manufacturing overhead Unit product cost $8.00 $2.00 $10.00 $20.00 The company's manufacturing overhead cost is mostly fixed. Only 30% of manufacturing overhead varies with the number of units of TK-15 produced. The special order will require customizing the TK-15s for an additional direct materials cost of $5 per unit and an additional direct labor cost of $5 per unit. If SOR-120 accepts the special order, the company will have to lease special equipment at a cost of $132,000 to do the customization. The company has sufficient excess capacity, and the special order would not affect the company's regular production and sales What is the minimum (.e, the break-even) sales price that the company should charge per unit of the customized TK-15 for this special order?

SOR-120 Inc. is a manufacturing company. It has received a special order for 11,000 units of its product TK-15. The normal selling price of one unit of TK-15 is $63 and its unit product cost is $20 as shown below Direct materials Direct labor Manufacturing overhead Unit product cost $8.00 $2.00 $10.00 $20.00 The company's manufacturing overhead cost is mostly fixed. Only 30% of manufacturing overhead varies with the number of units of TK-15 produced. The special order will require customizing the TK-15s for an additional direct materials cost of $5 per unit and an additional direct labor cost of $5 per unit. If SOR-120 accepts the special order, the company will have to lease special equipment at a cost of $132,000 to do the customization. The company has sufficient excess capacity, and the special order would not affect the company's regular production and sales What is the minimum (.e, the break-even) sales price that the company should charge per unit of the customized TK-15 for this special order?

Name: SOR-120 Inc. is a manufacturing company. It has received a special or
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Description: SOR-120 Inc. is a manufacturing company. It has received a special order for 11,000 units of its product TK-15. The normal selling price of one unit of TK-15 is $63 and its unit productcost is $20 as shown below:Direct materialsDirect laborManufactu

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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