Question
Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch
Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has excess capacity and sells the product in the market for $200 per unit. The following per unit data apply for sales to regular customers:
variable costs: fixed costs:
direct material $40 fixed manufacturing $30
direct labor $20 fixed marketing $10
variable overhead $10 fixed managerial $25
variable marketing $15
what is the minimum price that makes the company accept the offer?
[[selectone]]
a. $115
b. $85
c. $50
d. $150
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