Kator Co. has received a special, one-time, order for 1,000 KB-96 parts. Assume that Kator is operating

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Kator Co. has received a special, one-time, order for 1,000 KB-96 parts. Assume that Kator is operating at full capacity, and the next best alternative use of their capacity on existing equipment is LB-64 that would produce a contribution of $10,000. This product has the following financial structure per unit.

Selling Price	$150

Direct materials	$20
Direct labor	15
Variable manufacturing overhead	12
Fixed manufacturing overhead	30
Shipping and handling	3
Fixed selling and administrative	10
Total costs	$90

The minimum price that is acceptable for this one-time, special order is in excess of:

	a.	$87
	b.	$57
	c.	$60
	d.	$70

Related Book For answer-question

Accounting

ISBN: 978-0324662962

23rd Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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Posted Date: Feb 17, 2022 11:19 PM

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Kator Co. has received a special, one-time, order for 1,000 KB-96 parts. Assume that Kator is operating

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The correct answer is 60 Explanation Avoidable variable costs ... View the full answer

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