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What selling price per unit should immanuel be

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Reference no: EM132586179

The Immanuel Company has just obtained a request for a special order of 6,000 jigs to be shipped at the end of the month at a selling price of $7 each. The company has a production capacity of 90,000 jigs per month with total fixed production costs of $144,000. At present, the company is selling 80,000 jigs per month through regular channels at a selling price of $11 each. For these regular sales, the cost for one jig is: Variable production cost: $4.60 Fixed production cost: 1.80 Variable selling expense: 1.00

  • If the special order is accepted, Immanuel will not incur any selling expense; however, it will incur shipping costs of $0.30 per unit.

Question 1: At what selling price per unit should immanuel be indifferent between accepting or rejecting the speceical offer?

Reference no: EM132586179

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