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A manufacturer operating with excess capacity has been asked to fill a special order at a selling price of 58.25 per unit. The regular price
A manufacturer operating with excess capacity has been asked to fill a special order at a selling price of 58.25 per unit. The regular price is $10 per unit. No other use of the currently idle capacity can be found. The manufacturer's usual variable costs per unit are $3.50 for direct materials, $2.50 for direct labor, $1.00 for variable overhead, and $0.75 for sales commission. No sales commission would be paid on this special order. The average fixed overhead cost per unit is $0.85. Under the general decision rule, the minimum price per unit for this special order is A. $7.85 B. $7.00 C. $7.75 D. $7.50
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