Question: Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 80 percent (72,000 units) of its capacity:

Sales revenue $ 864,000
Cost of goods sold 333,000
Gross profit $ 531,000
Operating expenses 27,000
Net operating income $ 504,000

Caminos cost of goods sold and operating expenses are 80 percent variable and 20 percent fixed. Camino has received an offer from a professional wrestling association to design a coffee cup endorsed by its biggest star and produce 17,000 cups for $8 each (total $136,000). These cups would be sold at wrestling matches throughout the United States. Acceptance of the order would require a $51,000 endorsement fee to the wrestling star, but no other increases in fixed operating expenses

Per cup Total
Incremental Revenue
Less: Incremental Costs
Variable COGS
Variable Operating Expenses
Endorsement Fee
Incremental Profit

If Camino were operating at full capacity, what price would Camino require for the special order?

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