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Indigo Industries produces a product which has a $12 unit variable cost and a $5 unit fixed cost (based on producing 100,000 units). Indigo is

Indigo Industries produces a product which has a $12 unit variable cost and a $5 unit fixed cost (based on producing 100,000 units). Indigo is planning to manufacture 88,000 units this year and has production capacity for 125,000 units. Indigo has received a special order from a foreign wholesaler for 3,000 units. Indigo normally sells these units for $20 each. If the offer is accepted, Indigo will incur $2,400 in additional shipping costs. If Indigo wants to break even on the order, what is the lowest selling price that can accepted?

  • A
  • :
  • $20.80
  • B
  • :
  • $12.80
  • C
  • :
  • $11.20
  • D
  • :
  • $17.80

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