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Category > Accounting Posted 09 May 2017 My Price 4.00

Maij ess Corp.

18. Maij ess Corp. manufactures shirts, and it is considering whether or not it should accept a special order for 5,000
shins. The normal selling price of a shirt is $45 and its unit product cost is $36 as shown below: Direct materials $8.00 Direct labor $16.00
Manufacturing overhead $12.00
Unit product cost $36.00 Most of the manufacturing overhead is fixed; however, 30% of it is valiable with respect to the number of shirts
produced. The special order will require customizing the shins for the customer with an additional direct matelials
cost of $5 per shirt and an additional direct labor cost of $4 per shirt. If it accepts this order, Malj ess will have to
rent special equipment to handle the shirt customization at a cost of $22,000. The order would have no effect on Marj ess Colporation’s regular sales and it could be fulfilled using the company’s existing capacity without affecting
any other order. What is the minimum (i.e., the break-even) sales price per unit that Marjess should charge for this special order? a. $17.00
b. $49.40
c. $32.00
(1. $41.00

Answers

SuperTutor
(15)
Status NEW Posted 09 May 2017 02:05 AM My Price 4.00

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