5 A customer has requested that Lewelling Corporation fill a special order for 2,500 units of product S47 for $30 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $21.40: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 6.10 4.00 3.20 8.10 $21.40 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $1.70 per unit and that would require an investment of $15,000.00 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice $22,500 ($14,700) O $15,200 O ($2,300) 6 Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $35. The following cost data per fan is based on a full capacity of 151,000 fans produced each period. $ 7 $ 8 Direct materials Direct labor Manufacturing overhead (60% variable and 40% unavoidable fixed) $10 A special order has been received by Landor for a sale of 20,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $5 per fan for shipping. Landor is now selling 131,000 fans through regular channels each period. Assume that direct labor is an avoidable cost in this decision. What should Landor use as a minimum selling price per fan in negotiating a price for this special order? Multiple Choice $26 per fan $30 per fan $25 per fan $21 per fan