Reference no: EM132837238

Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has enough excess capacity to fill the order without affect other sales.

The following per unit data apply for sales to regular customers:

Variable costs

Direct materials            41
Direct labor                 19
Manufacturing support   38
Packaging costs              12

Fixed costs

Manufacturing support      45
Packaging costs               15

Problem 1: What is the minimum sales price that Welch should be willing to accept the order? In other words, at what sales price is Welch indifferent between accepting the order and rejecting the order?