Question

Sheffield Corp. incurred the following costs for 60000 units: Variable costs $360000 Fixed costs 392000 Sheffield has received a special order from a foreign company for 3000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4200 for shipping. If Sheffield wants to earn $6000 on the order, what should the unit price be

Answer 1

See below

Step-by-step explanation:

Given the information above, the break even point is where company cost covers the cost used in producing goods

= $360,000 + $392,000 = $752,000 total cost / 60,000 units = $12.53 cost per unit

3,000 units ordered × $12.53 cost per unit = $37,590 + $4,200 = $41,790 / 3,000 units = $13.93

Therefore, the unit price should be $13.93