Hall Company produces 1,000,000 widgets per year and has a total plant capacity of 1,200,000 widgets. Based on making 1,000,000 widgets a year, the revenues and costs for one widget are

The company was approached by a key customer to provide 200,000 widgets at a reduced price. What is the minimum price the company could accept on this special order?

a. $9.50

b. $19.50

c. $23.00

d. None of the above variable cost

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Revenue $23.00 Direct materials 5.00 Direct labour 2.50 Variable overhead Fixed overhead 2.00 10.00 Total cost $19.50