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Fruit Bouquet Inc manufactures fruit bouquets. The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates
Fruit Bouquet Inc manufactures fruit bouquets. The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year. The company has provided the following data for the year: No. of units produced and sold 600,000 units Sales price $40per unit Variable manufacturing costs $20 per unit Fixed manufacturing costs $1,000,000 per year Variable selling and administrative Icosts $5 per unit Fixed selling and administrative costs $600,000 per year Fruit Bouquet Inc. receives an offer to produce 7000 fruit bouquets for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum sales price the company should accept for the order? O $40 O $25 O $20 O $15
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