Explore BrainMass

Explore BrainMass

    Price per Unit for Special Order

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Chechny business has received one time special order for 1,000 units. Producing the order will have no effect on production and sales of other units. They buyer's name will be stamped on each unit, at a costs of $2,000. Normal cost data, excluding stamping, as follows:

    Direct materials..............................$10 per unit
    Direct labor.....................................16 per unit
    Variable overhead...........................12 per unit
    Allocated fixed overhead..................12 per unit
    Allocated fixed selling expense..........8 per unit

    What selling price per unit will this business require to earn $3,000 on the order?

    Explain and show calculations of what selling price per unit will this company require to earn $3,000 on the order.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:35 am ad1c9bdddf
    https://brainmass.com/business/accounting/347480

    Solution Preview

    The order will have no effect on other units would imply that there is excess capacity. Under this condition, the incremental costs for the order would be the ...

    Solution Summary

    The solution explains how to calculate the price per unit for special order using a formula.

    $2.19

    ADVERTISEMENT