Calculate the minimum price per chair

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Reference no: EM13754348

Bob Johnson, Inc., sells a lounging chair for $28 per unit. It incurs the following costs for the product: direct materials, $12; direct labor, $6; variable overhead, $2; and fixed overhead, $1.

The company has received a special order for 55 chairs. The order would require rental of a special tool for $340. Bob Johnson, Inc., has sufficient idle capacity to produce the chairs for this order.

Required:

Calculate the minimum price per chair that the company could charge for this special order if management requires a $530 minimum profit on any special order. If required round your intermediate calculations to two decimal places. Round your final answer to two decimal places.

Reference no: EM13754348

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