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Zorro Corp. manufactures children s costumes. Per unit production costs for a basic cape and mask at $ 1 0 . 2 5 / unit

Zorro Corp. manufactures childrens costumes. Per unit production costs for a basic cape and mask at $10.25/unit broken down as follows: direct materials $1.75; direct labour $4.00; variable manufacturing overhead $2.50; fixed manufacturing overhead $2.00. These units are regularly priced at $15.00 per unit. What is the lowest price Zorro Corp. should consider a basic cape/mask for as part of a special order?
Question 7 Answer
a.
An amount in excess of $8.25
b.
An amount in excess of $10.25
c.
An amount in excess of $4.75
d.
An amount in excess of $5.75

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