Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $42. The following cost data per fan is based on a full capacity of 150,000 fans produced each period. Direct materials$8Direct labor$9Manufacturing overhead (70% variable and 30% unavoidable fixed)$ 10A special order has been received by Landor for a sale of 25,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $4 per fan for shipping. Landor is now selling 120,000 fans through regular channels each period. Assume that direct labor is an avoidable cost in this decision. What should Landor use as a minimum selling price per fan in negotiating a price for this special order?
A. $31 per fan
B. $27 per fan
C. $24 per fan
D. $28 per fan
Answer: D
You might also like to view...
Describe the difference between self-image and self-esteem.
What will be an ideal response?
Corporate social responsibility advocates argue that ethical guidance for corporate managers may come from:
A. corporations giving preference to their employees over other constituencies. B. corporate cultures that hold high concern for leading with fear. C. corporate or industry codes of conduct. D. corporations promoting avoidance behavior among employees.
____ skills are particularly important in the customer service and support industry because customer service is often ranked as one of the most stressful occupations.
A. Business B. Soft C. Technical D. Self-management
A ________ is a situation in which one corporation acquires all the shares of another corporation, and both corporations retain their separate legal existence
A) reverse takeover B) merger C) share exchange D) spin-off