Wagner Company Sells Product a for $21 Per Unit A Special Order Offering to Buy 20,000 Units Has Been
Wagner Company sells product A for $21 per unit. full capacity of 200,000 units is as follows: A special order offering to buy 20,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $2 per unit for shipping. Wagner has sufficient idle capacity to manufacture the additional units.
Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labour is an avoidable cost in this decision. In negotiating a price for
The special order, the minimum acceptable selling price per unit should be:
A) $15.
B) $17.
C) $16.
D) $13.
Correct Answer:
Verified
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