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 Variable selling
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
$6.00
$10.50
$18.00
$8.40
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