Question: Corp makes widgets. Variable costs per unit are $4. Fixed cost per unit (at an output level of 100) are $2 per unit. The normal

Corp makes widgets. Variable costs per unit are $4. Fixed cost per unit (at an output level of 100) are $2 per unit. The normal sales price per unit is $10. A special-order customer approaches Corp offering to buy 40 widgets. Assume there is no excess capacity. Assume that, to fill the special order, Corp must buy and completely use up (no future use) a special material for $100

What price would Corp need to charge, per unit, for the special order so that operating income will be the same whether or not it accepts the special order?

A) 11.50

B) 12.50

C) 10

D) 11

E) 11.25

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!