Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Acme Company manufactures widgets. At the budgeted annual production level of 4,000 units, Acme's per-unit manufacturing costs of a widget are as follows: direct materials

Acme Company manufactures widgets. At the budgeted annual production level of 4,000 units, Acme's per-unit manufacturing costs of a widget are as follows: direct materials $28, direct labor $10, variable overhead $45, and fixed overhead $16. A customer has offered to buy 500 units at a reduced price. Accepting the special order would not impact Acme's fixed costs or its variable selling and administrative expenses. On the other hand, Acme currently has no excess capacity and the special order would require 30 hours of machine time, which could be used instead to produce products with a total contribution margin of $6,000. What is the minimum per-unit selling price that Acme must charge to break even on the special order? Round to the nearest whole dollar amount and do not enter a dollar sign or a decimal point (e.g., enter 89, not $89.00).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Reporting And Analysis

Authors: Jennifer Maynard

2nd Edition

0198745311, 9780198745310

More Books

Students also viewed these Accounting questions