Smith Accounting Services is considering a special order that it

Smith Accounting Services is considering a special order that it received from one of its corporate clients. The special order calls for Smith to prepare the individual tax returns of the corporation’s four-largest shareholders. The company has idle capacity that could be used to complete the special order. The following data have been gathered about the preparation of individual tax returns:

Materials cost per page............$1

Average hourly labor rate............$60

Standard hours per return.......... 4

Variable overhead cost per page........$0.50

Fixed overhead cost per page.........$0.50

Smith Accounting Services would be satisfied with a $40 gross profit per return. Computer the minimum bid price for the entire order.