Question Completion Status 46 67 42 43 QUESTION 42 Reference: 12-04 The Varane Company makes a single product called a Hom. The company has the capacity to produce 40,000 Homs per year. Per-unit costs to produce and sell one Hom at that activity level follow Direct Materials $20 Direct Labour $10 Variable Manufacturing Overhead 155 Fixed Manufacturing Overhead $7 Variable Selling Expense 58 Fixed Selling Expense $2 The regular selling price for one Hom is 560. A special order has been received at Varone from the Fairview Company to purchase 8,000 Homs next year at 15% off the regular selling price. If this special order is accepted, the variable selling expense will be reduced by 25%. However, Varone would have to purchase a specialized machine to engrave the Fairview name on each Hom in the special order. This machine would cost $12,000, and Varone would have no use for it after the special order was filled. The total fixed costs, both manufacturing and selling, are constant within the relevant range of 30,000 to 40,000 Homs per year. Assame direct labour is a variable cost. 1 Varone can expect to sell 32,000 Homs next year through regular channels, at what special order price from Fairview should Varone be economically indifferent between either accepting or not accepting this special order? $42.50. $51.00. $39.60 548 20 QUESTION 43 Click Save and Sullt to save and submit. Click Save All Answers to sove all answers