Zolas' Heaters is approached by Ms.Leila,a new customer,to fulfill a large one-time-only special order for a product similar to one offered to regular customers.Zolas' Heaters has excess capacity.The following per unit data apply for sales to regular customers:
$\begin{array}{ll}
\text { Direct materials } & \$ 450.00 \
\text { Direct manufacturing labor } & 160.00 \
\text { Variable manufacturing support } & 100.00 \
\text { Fixed manufacturing support } & \underline{210.00} \
\quad \text { Total manufacturing costs } & 920.00 \
\text { Markup (25\% of total manufacturing costs) } & \underline{230.00} \
\text { Estimated selling price } & \$ 1150.00 \
\end{array}$
For Zolas' Heaters,what is the minimum acceptable price of this one-time-only special order?
A)$710.00
B)$920.00
C)$610.00
D)$1150.00

Question

Quizplus · Accepted Answer

The minimum acceptable price is the variable cost per unit, which is $710.00 ($450.00 + $160.00 + $100.00).

Zolas' Heaters Is Approached by Ms For Zolas' Heaters,what Is the Minimum Acceptable Price of This