Forrest Corporation manufactures parts that are used in the production of washers and dryers. The following costs are associated with part no. 65: Direct materials$50 Direct labor 19 Variable manufacturing overhead 22 Fixed manufacturing overhead 15 Variable selling costs 11 The company received a special-order inquiry from an appliance manufacturer in Brazil for 15,000 units of part no. 65. Only $3 of fixed manufacturing will be incurred on the order, and the variable selling costs per unit will amount to only $5. Since Forrest has excess capacity, the minimum price that Forrest should charge the Brazil manufacturer is:
A. $99.
B. $105.
C. $96.
D. $108.
E. None of the answers is correct.
Answer: A
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