Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kim Exporters, LTD produces wall mounts for flat panel television sets. The company just received a special order from Rakesh offering to buy 2,500 wall

Kim Exporters, LTD produces wall mounts for flat panel television sets.

The company just received a special order from Rakesh offering to buy 2,500 wall mounts for $29 per unit. Rakesh requires all 2,500 units to come from the same supplier (i.e., he cannot purchase less than 2,500 units).

The current, normal sales price per unit is $46. Variable costs to produce are $26. Total Fixed costs are $216,000.

Kim Exporters has capacity of 24,000 units. Before the special order, its sales manager Kim estimated that she would be able to sell 22,000 units to existing customers.

Via a financial perspective, Kim feels she must decline the offer.

But, she would like to counter Rakesh's offer with a different selling price.

Required

Assuming a financial perspective, what is the lowest price per unit that Kim Exporters, LTD would be willing to accept for these 2,500 units from Rakesh?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Applications Of Accounting Information Systems

Authors: David M. Shapiro

1st Edition

194999158X, 9781949991581

More Books

Students also viewed these Accounting questions