Question
Firm A sells 25,000 frisbees per year for $18 each and incurs the following costs: Variable manufacturing costs $ 125,000 Fixed manufacturing costs $ 110,000
Firm A sells 25,000 frisbees per year for $18 each and incurs the following costs:
Variable manufacturing costs | $ 125,000 |
Fixed manufacturing costs | $ 110,000 |
Variable selling and administrative costs | $ 85,000 |
Fixed selling and administrative costs | $ 40,000 |
A major retailer wants to buy a special order of 6,000 frisbees at a special price. Firm A will not suffer any changes to its fixed costs by taking the order. What is the minimum price at which Firm A can sell the special order frisbees in order to not take a loss on the sale?
Group of answer choices
$18.00
$6.00
$8.40
$10.50
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started