Question: Please explain the breakdown of the problem to get the solution. John Boyd Corporation manufactures and sells 1,000 tractors each month. The primary component in

Please explain the breakdown of the problem to get the solution.

Please explain the breakdown of the problem to
John Boyd Corporation manufactures and sells 1,000 tractors each month. The primary component in each tractor is the motor. John Boyd has the monthly capacity to produce 1,300 motors. The variable costs associated with manufacturing each motor are shown below: Direct materials $ 25 Direct labor $ 17 Variable manufacturing overhead $ 30 Fixed manufacturing overhead per month (for up to 1,300 units of production) averages $28,000. Joan Reid, Incorporated has offered to purchase 210 motors from John Boyd per month to be used in its own outboard motors. Assuming John Boyd wants to earn a pretax profit of $10,710 on this special order, what price must it charge Joan Reid? $123 per unit $83 per unit $100 per unit $72 per unit

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