If the incremental costs for a special order of 4,000 units are $6,600 and the company would like to earn a minimum of $1.10 profit per unit,the minimum bid price would be
A)$1.65 per unit.
B)$2.50 per unit.
C)$2.75 per unit.
D)$3.46 per unit.

Question

Quizplus · Accepted Answer

First, we need to calculate the total cost of the special order:

Total cost = Incremental cost + Desired profit

Total cost = $6,600 + ($1.10 x 4,000)

Total cost = $6,600 + $4,400

Total cost = $11,000

Now, we can calculate the minimum bid price per unit:

Minimum bid price = Total cost / Number of units

Minimum bid price = $11,000 / 4,000

Minimum bid price = $2.75 per unit

Therefore, the best choice is C as it is the only option that matches the minimum bid price calculated.

If the Incremental Costs for a Special Order of 4,000