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Determine the minimum price acceptable

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Reference no: EM132819274

Deviant Company is a manufacturer of industrial components. One of its products was Product X, with a selling price of Php360 per unit with a cost per unit of Php250. The Company received a special, one-time, order for 2,400 units of Product X. Assuming that the Company is operating at full capacity and that the contribution margin of the output that would be displaced by the special order is Php24,000.

Problem 1: Assume that the Company is not operating at full capacity and there is no contribution margin that can be lost, determine the minimum price acceptable.

a. Php250
b. Php260
c. Php300
d. Php360

Problem 2: Assuming that the Company is operating at full capacity and that the contribution margin of the output that would be displaced by the special order is Php24,000. Determine the minimum price acceptable.

a. Php250
b. Php260
c. Php300
d. Php360

Reference no: EM132819274

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