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Turner Company sells product X for $21 per unit. Unit product costs are as follows:

Turner Company sells product X for $21 per unit. Unit product costs are as follows:






Direct materials


$4




Direct labour


5




Manufacturing overhead


10




Total


$19


A special order to purchase 20,000 unis was recently received. There is enough capacity to fill the order and filling this order would not disrupt current operations. Warner Company would incur an additional $3 per unit for shipping costs. $40% of the manufacturing overhead costs are fixed and would be incurred no matter how many units are produced. In negotiating a price, the minimum acceptable selling price would be:



a. $19

b. $18

c. $22

d. $16
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Accounting-8058248.doc

Turner Company sells product X for $21 per unit. Unit product costs are as follows: Direct materials $4 Direct labour $5 Manufacturing overhead 10 Total $19 A special order to purchase 20,000 unis...

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