1. Baby Company manufactures dolls that are sold to various distributors. The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 70% of capacity for the other six months of the year. The company has provided the following data for the year:

Number of units produced and sold	600,000	units
Sales price	$30	per unit
Variable manufacturing costs	$10	per unit
Fixed manufacturing costs	$1,000,000	per year
Variable selling and administrative costs	$3	per unit
Fixed selling and administrative costs	$500,000	per year

Baby receives an offer to produce 7000 dolls for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum sales price the company should accept for the order?

Select one:

A.

$30

B.

$7

C.

$13

D

$10