Duncan Co. sells product P at a price of $38 a unit. The per-unit cost data are: direct materials $8, direct labour $10, and overhead $12 (25% fixed and 75% variable). Wolff has sufficient capacity to accept a special order for 40,000 units just received. Selling costs associated with this order would be $3 per unit.
The minimum selling price per unit should be:
A) $24
B) $30
C) $32
D) $36

Question

Quizplus · Accepted Answer

The minimum selling price should cover variable costs: direct materials ($8), direct labour ($10), variable overhead ($9), and selling costs ($3), totaling $30 per unit.

Duncan Co Sells Product P at a Price of $38 a a Unit