Question
Lamargot Corp. currently produces and sells 4,000 units per month for its current customers. It has a practical capacity of 5,000 units per month. The
Lamargot Corp. currently produces and sells 4,000 units per month for its current customers. It has a practical capacity of 5,000 units per month. The selling price is $900 per unit. Total costs of production at a level of 4,000 units include $2,000,000 in variable costs per month plus $500,000 in fixed costs per month. Suppose a new customer has an emergency need for 2,000 units next month and Lamargot cannot schedule any overtime production. What is the minimum(floor) price that Lamargot Corp. should charge per unit for the special order? Round the answer to the nearest whole dollar.
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