Question
Farnsworth Television makes and sells portable television sets. Each television regularly sells for $360. The following cost data per television are based on a full
Farnsworth Television makes and sells portable television sets. Each television regularly sells for $360. The following cost data per television are based on a full capacity of 20,000 televisions produced each period:
Direct materials | $65 |
Direct labor | $50 |
Manufacturing overhead (70% variable, 30% unavoidable fixed) | $60 |
A special order has been received by Farnsworth for a sale of 3,500 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $14 per television for shipping. Farnsworth is now selling 8,500 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order? |
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