Question

Marigold Corp. incurred the following costs for 52000 units: Variable costs $312000 Fixed costs 392000 Marigold has received a special order from a foreign company for 2000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $2400 for shipping. If Marigold wants to earn $4000 on the order, what should the unit price be

Answer 1

The unit price is $9.2 per unit

Step-by-step explanation:

The computation of the unit price is shown below

Variable costs for 2,000 units is

= Variable cost ÷ units × special order units

= $312,000 ÷ 52,000 units × 2,000 units

= $12,000

Now the unit price is

= (variable cost + shipping charges + earnings) ÷ special order units

= ($12,000 + $2,400 + $4,000) ÷ (2,000 units)

= $9.2 per unit

Hence, the unit price is $9.2 per unit

The same is to be considered