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Data: Alpine, Inc., has been experiencing losses for some time, as shown by its most recent income statement: All variable expenses in the company vary
Data: Alpine, Inc., has been experiencing losses for some time, as shown by its most recent income statement: All variable expenses in the company vary in terms of units sold, except for sales commissions, which are based on sales dollars. Variable manufacturing overhead is 50 cents per unit. The company's plant has a capacity of 70,000 units. Management is particularly disappointed with 2016's operating results. Several possible courses of action are being studied to determine what should be done to make 2017 profitable. REQUIRED: Refer to the original data. The company has been approached by an overseas distributor who wants to purchase 15,000 units on a special price basis. There would be no sales commission on these units. However, shipping costs would increase by 80 percent, and variable administrative costs would be reduced by 50 percent. Alpine, Inc., would have to pay a foreign import duty of $3, 500 on behalf of the overseas distributor in order to get the goods into the country. Given these data, what unit price would have to be quoted on the 15,000 units by Alpine, Inc., to allow the company to earn a profit of $18,000 in the year 2016 on total operations? Regular business would not be disturbed by this special order
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