Landor Appliance Company makes and sells electric fans. Each fan regularly sells for $42. The following cost

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Landor Appliance Company makes and sells electric fans. Each fan regularly sells for $42. The following cost data per fan is based on a full capacity of 150,000 fans produced each period.

Direct materials ............................$8

Direct labor ...................................$9

Manufacturing overhead .............$10

(70% variable and 30% unavoidable fixed)

A special order has been received by Landor for a sale of 25,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $4 per fan for shipping. Landor is now selling 120,000 fans through regular channels each period. What should Landor use as a minimum selling price per fan in negotiating a price for this special order?

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Question Posted: May 06, 2013 05:27 AM

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Landor Appliance Company makes and sells electric fans. Each fan regularly sells for $42. The following cost

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