Question
Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers.
Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:
Variable costs:
Direct materials$140
Direct labor100
Manufacturing support105
Marketing costs65
Fixed costs:
Manufacturing support175
Marketing costs65
Total costs650
Markup (50%)325
Targeted selling price$975
For Crandle Manufacturers Inc., what is the minimum acceptable price of this special order?
A) $400
B) $320
C) $410
D) $640
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