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Miami Company manufactures outdoor fireplaces. For the first 9 months of 2021, the company has reported the following operating results, while it was operating
Miami Company manufactures outdoor fireplaces. For the first 9 months of 2021, the company has reported the following operating results, while it was operating at 96% of plant capacity. The cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed. In October 2021, Miami Company received a special order for 10,000 fireplaces at $60 each from Bina Company. Accepting this order would result in an additional $25,000 of shipping costs, but it would have no effect on fixed operating expenses. Sales (300,000 units) Cost of Goods Sold Gross Profit Operating Expenses Net Operating Income $27,000,000 20,250,000 6,750,000 3,000,000 $3,750,000 17. If the cost of goods sold was 40% fixed, and the operating expenses are 60% variable, what would be the minimum acceptable selling price per fireplace that should be set for any special order? $46.50 per fireplace $61.00 per fireplace $77.50 per fireplace $90.00 per fireplace None of the above
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