Chapter 3, Problem 3.9AP

Please provide the accurate answer to this general accounting problem using valid techniques.

I am trying to find the accurate solution to this general accounting problem with the correct explanation.

Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $34. The following cost data per fan is based on a full capacity of 157,000 fans produced each period. Direct materials $ 9 Direct labor $ 9 Manufacturing overhead (80% variable and 20% unavoidable fixed) $ 10 A special order has been received by Landor for a sale of 20,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $3 per fan for shipping. Landor is now selling 137,000 fans through regular channels each period. Assume that direct labor is an avoidable cost in this decision. What should Landor use as a minimum selling price per fan in negotiating a price for this special order?