Andretti company has a single product called dak the

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Reference no: EM13600386

Andretti Company has a single product called Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company's unit costs at this level of activity are given below:

  • Direct materials $10.00
  • Direct labor $4.50
  • Variable manufacturing overhead $2.30
  • Fixed manufacturing overhead $5.00 ($300,000 total)
  • Variable selling expenses $1.20
  • Fixed selling expenses $3.50 ($210,000 total)
  • Total cost per unit $26.50

Assume again that Andretti has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20,000 Daks. Import duties on the Daks would be $1.70 per unit, and cost for permits and licenses would be $9,000. The only selling costs that would be associated with the order would be $3.20 per unit shipping cost. Compute the break-even price for the order.

Reference no: EM13600386


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