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Assume that MTA Sandwiches sells sandwiches for 52.85 each The cos: or each sandwich follows: Matarials Labur Variable overhead Fixed overhead (317,370 per month, 19.
Assume that MTA Sandwiches sells sandwiches for 52.85 each The cos: or each sandwich follows: Matarials Labur Variable overhead Fixed overhead (317,370 per month, 19. 300 units per month) 0.20 0.30 0.90 Total cost per sandwich 2 20 One of MTA's regular customers asked the company to l a special order of sandwiches at a selling price of $1.95 each tor a fund-raising event sponsored by a social club at the local college. MTA has capacity to ilt without affecting total fiked costs for the month. LITA's general manager was concemed about seling the sandwiches below the cost of $2.20 per sandwich and has asked for your advice Raquired . oparc a schedu CIO show the Impact on M A's pro s o provding 400 sand c cs n additon to the og lar production and sacs o 19 300 sandwiches per month Select option higher" or lo er" keeping Status Quo the base select None " there is no e ect. Status Quo Alternetive 19,300 Units 19,700 Units Difference Salas raVAnLS Le88 varlable coste Materials Labur Variablc owerhead Total varlabla Conibution margin Less: Fixed costs Operating proit b. Based solalhy on the data ghen, what is the lowest price por sandwich at which the special order can bo lled wrhout reducing MTA s pronts? (Round your answer to 2 decimal places.) ar sanduich
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