Zorro Corp. manufactures children$$s costumes. Per unit production costs for a basic cape and mask at $$10\mathrm{.}25/$unit broken down as follows: direct materials $$1\mathrm{.}75$; direct labour $$4\mathrm{.}00$; variable manufacturing overhead $$2\mathrm{.}50$; fixed manufacturing overhead $$2\mathrm{.}00.$ These units are regularly priced at $$15\mathrm{.}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\mathrm{.}25$

b$.$

An amount in excess of $$10\mathrm{.}25$

c$.$

An amount in excess of $$4\mathrm{.}75$

d$.$

An amount in excess of $$5\mathrm{.}75$