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4)Younes Inc. manufactures industrial componentes. One of its products, which is used in the construction of industrial air conditioners, is known as P06. Data concerning

4)Younes Inc. manufactures industrial componentes. One of its products, which is used in the construction of industrial air conditioners, is known as P06. Data concerning this product are given below:

Per Unit

Selling price220

Direct materials 38

Direct Labor1

Variable manufacturing overhead 8

Fixed manufacturing overhead 16

Variable selling expense 4

Fixed selling and administrative expense 16

The above per unit data are based on anual production of 4,000 units of the componente. Assume that direct labor is a variable cost.

The company has received a special, one-time-only order for 500 units of componente P06. There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. However, assume that Younes has no excesso capacity and this special order would require 30 minutes of the constraining resource, which could be used instead to produce products with a total contribution margin of $20,000.

What is the minimum price per unit below which the company should not accept the special order?

A)$83 per unit

B)$123 per unit

C)$40 per unit

D)$91 per unit

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