Part 5 (15 minutes)

The following data relate to a year's budgeted activity for Bassam Corporation, a single product company:

Beginning inventory

Add: Production

Available

Less: Sales

= Ending inventory

UNITS

30,000

120,000

150,000

110,000

40.000

Selling price

Variable manufacturing costs

Variable marketing costs

Fixed manufacturing costs (based on

100,000 units)

Fixed manufacturing costs (based on

100.000 units)

Per Unit

$ 5.00

$ 1.00

$ 2.00

$ 0.25

$ 0.65

Total fixed costs remain unchanged within a range of 25,000 units to total capacity of 160,000 units.

A special order is received to purchase 10,000 units to be used in an unrelated market.

The sale would require production of 10,000 extra units.

Required:

What price per unit should be charged on the special order to increase operating profit by $9,000?

The following data relate to a year's budgeted activity for Bassam Corporation, a single product company: Total fixed costs remain unchanged within a range of 25,000 units to total capacity of A special order is received to purchase 10,000 units to be used in an unrelated market. 160,000 units. The sale would require production of 10,000 extra units. Required: What price per unit should be charged on the special order to increase operating profit by $9,000