Laporte Company produces a single product L1.The following is information pertaining to the selling price and variable costs of L1:

Selling price$200 per unit

Direct material$60 per unit

Direct manufacturing labor

(2 DML hrs. at $10 per hr.)$20 per unit

Variable overhead

(4 machine hrs. at $10 per hr.)$40 per unit

Variable selling and admin.20% of total sales dollars

The monthly fixed costs for Laporte are as follows:

Fixed overhead$40,000

Fixed selling and admin.$9,000

Laporte has a maximum of 8000 machine hours available each month and Laporte will be unable to purchase new machines in the short run.

Assume that Laporte is currently producing and selling 1500 units of L1 per month.The company receives a special order to produce more L1 in the upcoming month.It will cost an additional $2400 in fixed costs to fill the special order and no variable selling and administrative costs will be incurred on the special order.The special order must be accepted or rejected in its entirety.

a.What is in theory the minimum selling price per unit that Laporte is willing to accept for the special order if the order calls for 400 units?Show your work.

b.What is in theory the minimum selling price per unit that Laporte is willing to accept for the special order if the order calls for 800 units?Show your work.

Having a little trouble figuring out where to start on this problem. Could someone please help me and show work. Thank you