Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: Direct materials $2,300 Direct labor 960 Factory overhead (30% variable) 1,800 Selling expenses (50% variable) 900 Administrative expenses (10% variable) 840 Total per unit $6,800 Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order. If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit? Group of answer choices $4,064 $6,900 $4,514 $5,100
Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: Direct materials $2,300 Direct labor 960 Factory overhead (30% variable) 1,800 Selling expenses (50% variable) 900 Administrative expenses (10% variable) 840 Total per unit $6,800 Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order. If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit? Group of answer choices $4,064 $6,900 $4,514 $5,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units:
| Direct materials |
$2,300 |
| Direct labor |
960 |
| Factory |
1,800 |
| Selling expenses (50% variable) |
900 |
| Administrative expenses (10% variable) |
840 |
| Total per unit |
$6,800 |
Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order.
If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?
Group of answer choices
$4,064
$6,900
$4,514
$5,100
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