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What is the minimum price at which Firm A can sell order

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Question - Firm A sells 25,000 frisbees per year for $18 each and incurs the following costs:

Variable manufacturing costs $125,000

Fixed manufacturing costs $110,000

Variable selling and administrative costs $85,000

Fixed selling and administrative costs $40,000

A major retailer wants to buy a special order of 6,000 frisbees at a special price. Firm A will not suffer any changes to its fixed costs by taking the order. What is the minimum price at which Firm A can sell the special order frisbees in order to not take a loss on the sale?

a. $6.00

b. $10.50

c. $18.00

d. $8.40

Reference no: EM132612374

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