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Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is

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Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is as follows: Direct materials Direct labor $ 6 Overhead (2/3 of which is variable) 9 Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30.000 relays. Mazeppa has the capacity to fil the order However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor a. Asume that Mazeppa is currently operating at a level of 100,000 units. What unt price should t charge the distributor if it wishes to increase operating income by $5 for each unit included in the special order? (Do not round intermediate calculations.) company wil not have to turn away any of ts a current operating 1 customers i unit included in the special order, it only needs to generate a son in order to fll the special order, If it wishes to increase operating incone margin per unit of Thus, the Selung price per unit included in the specia order as shown below I Sale Selling price Less Direct materials Direct labor Variable overhead Additional shipping costs coniribution margin per unit

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