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A special order has been received by Landor for a sale of 25,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $4 per fan for shipping. Landor is now selling 120,000 fans through regular channels each period. What should Landor use as a minimum selling price per fan in negotiating a price for this special order

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abiolataiwo2015

Answer:

$28

Explanation:

Calculation for What should Landor use as a minimum selling price per fan in negotiating a price for this special order

Direct materials$8

Direct labor$9

Variable manufacturing overhead $7

($10 × 0.70)

Variable selling cost $4

Minimum selling price $28

Therefore What should Landor use as a minimum selling price per fan in negotiating a price for this special order is $28