1.) Cost-Plus Pricing

a.) The P company is considering the production of a new cell phone battery life extender. They would like to price the product at 35% about full cost. Assuming the variable cost per unit is $40 and the annual fixed cost is $95,000, what will be the full cost per unit and the resulting selling price if 1,400 units are produced and sold?

b.) Special Order Pricing: assume the facts in #1 above and you receive a request to sell an additional 200 units at $60. Would you accept this offer and what would be your margin if you do?