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Link Company incurred the following costs for 50,000 units: Variable costs $180,000 Fixed costs 240,000 Link has received a special order from a foreign company
Link Company incurred the following costs for 50,000 units: Variable costs $180,000 Fixed costs 240,000 Link has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $8,500 for shipping. If Link wants to earn $9,000 on the order, what should the unit price be? Select one: A. $3.60 B. $11.90 C. $7.10 D. $5.30 E. None of the above. Zang Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $30 and Zang would sell it for $66. The cost to assemble the product is estimated at $21 per unit and the company believes the market would support a price of $85 on the assembled unit. What decision should Zang make? Select one: A. Sell before assembly, the company will be better off by $1 per unit. B. Sell before assembly, the company will be better off by $2 per unit. C. Process further, the company will be better off by $29 per unit. D. Process further, the company will be better off by $14 per unit. E. None of the above
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