A company has just received a special, one-time order for 1,000 units. Producing the order will have no effect on the production and sales of other units. The buyer's name will be stamped on each unit, at a cost of $1.50 per unit. Normal cost data, excluding stamping, follows: Direct materials…………………………… $ 10 per unit Direct labor……………………………….. 16 per unitVariable overhead………………………… 4 per unitAllocated fixed overhead…………………. 12 per unitAllocated fixed selling expense…………… 8 per unit Prepare an analysis that indicates the selling price per unit this company will require to earn $3,000 on the order.
What will be an ideal response?
| ? | Per Unit | For 1,000 Units |
| Variable costs of producing the special order: | ? | ? |
| Direct materials | $10.00 | $10,000 |
| Direct labor | 16.00 | 16,000 |
| Variable overhead | 4.00 | 4,000 |
| Additional variable cost | 1.50 | 1,500 |
| Total variable costs | ? | $31,500 |
| Desired profit | ? | 3,000 |
| Required revenue | ? | $34,500 |
Required selling price per unit ($34,500/1,000) | $ 34.50 | ? |
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