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Lasting Products Ltd. produces a single product. The following is a summary of the cost to produce and sell one unit: Cost per unit Direct
Lasting Products Ltd. produces a single product. The following is a summary of the cost to produce and sell one unit: Cost per unit Direct materials 95 35.00 Direct labour 25.00 Variable overhead 1?.50 Variable selling expenses ?.25 Fixed overhead 2.00 Total cost $ 36.?5 The xed overhead cost of $2 per unit is based on the expected annual production of 125,000 units. If more than 125,000 units are produced, Lasting will incur an additional $215,000 of xed overhead costs. Fixed selling and administrative expense is $150,000, regardless of the number of units sold. Lasting expects to sell 122,000 units in the coming year. Lasting has been invited to bid on a contract to supply a special order of 10.000 units. Lasting expects to incur only $2.50 per unit in variable selling expenses to ll the special order; all other variable costs will remain unchanged. The 10,000 units will be added to Lasting's regular production schedule. What is the acceptable minimum price that Lasting should bid? a) $ 00.00 b) $ 05.00 c) $101.50 d) $100.25
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