Question
XYZ Co. is a producer of a generator component. This product, LK-2022, has the following selling price and costs per unit: Selling price $300 Direct
XYZ Co. is a producer of a generator component. This product, LK-2022, has the following selling price and costs per unit: Selling price $300 Direct materials 125 Direct labor 25 Variable manufacturing overhead 50 Shipping and handling 5 Fixed manufacturing overhead 15 Fixed selling and administrative 10 Total costs $230 XYZ has received a one-time special order for 2,000 units of LK-2022. XYZ is now operating at full capacity, 10,000 units, at a total cost of $2,300,000. To produce this order would cause a 25% increase in fixed costs. What is the minimum price that is acceptable for this one-time, special order (per unit)?
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