A company incurred the following costs for 70,000 units. The company has received a special order...
A company incurred the following costs for 70,000 units. The company has received a special order from a foreign company for 3,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $6,300 for shipping. If the company wants to break even on the order, what should the unit sales price be? *
1 point Variable costs = 420K Fixed Costs 392K
Homework Answers
Answer:
Unit sale price = $ 8.10
Explanation:
At Break-even point, the profit = 0
Profit = Sales (-) Variable cost (-) Fixed cost
Let the sale price be x.
0 = 3000x (-) [($ 420,000 / 70,000) * 3,000] (-) $ 6,300
0 = 3000x (-) $ 18,000 (-) $ 6,300
x = $ 24,300 / 3,000
= $ 8.10
In case of any doubt, please comment.
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