Question
The Buchanan Company has gathered the following information for a unit of its most popular product: Direct materials 12.10 Diret labor 6.10 Overhead (40% variable)
The Buchanan Company has gathered the following information for a unit of its most popular product:
Direct materials | 12.10 |
Diret labor | 6.10 |
Overhead (40% variable) | 10.10 |
--- | |
Cost to manufacture | 28.30 |
Desired markup | 14.15 |
-- | |
Target selling price | $42.45 |
The above cost information is based on 4,000 unit. A distributor has offered to buy 2,100 units at a price of $32.35 per unit. The distributor claims this special order would not disturb regular sales at $42.45. Special packaging and other selling expenses would be an additional $0.60 per unit for the special order. How many units of regular sales could be lost before thsi contrat is not profitable? (Round your final answer to the nearest whole unit.) ((Please show work))
a. 1,051 units b. 988 units c. 4,000 units d. 0 units e. 2,100 units
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