Golden Company sells its product for $42 per unit. The company's unit product cost based on...

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Golden Company sells its product for $42 per unit. The company's unit product cost based on the full capacity of 400,000 units is as follows: Direct materials Direct labor Manufacturing overhead Unit product cost $8 10 12 $30 A special order offering to buy 40.000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $6 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labor is an avoidable cost in this decision. In negotiating a price for the special order. what is the minimum acceptable selling price per unit? Golden Company sells its product for $42 per unit. The company's unit product cost based on the full capacity of 400,000 units is as follows: Direct materials Direct labor Manufacturing overhead Unit product cost $8 10 12 $30 A special order offering to buy 40.000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $6 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labor is an avoidable cost in this decision. In negotiating a price for the special order. what is the minimum acceptable selling price per unit?

Answer rating: 100% (QA)

To calculate the minimum acceptable selling price per unit for the special order we need to consider ... View the full answer