Solution-Calculate kemper should establish a selling price

Calculate kemper should establish a selling price of

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Reference no: EM132548006

The Kemper Company sells a product at a price of $21 per unit. Kemper's cost per unit based on a full capacity utilization of 200,000 units is:

Direct material $ 4

Direct labor 5

Manufacturing overhead (2/3 of which is fixed) 6

Total $15

A special order for 20,000 units has been offered by a foreign importer if Kemper can price the product more competitively than $21 per unit. The only selling costs that would be incurred with the special order are $3 per unit for shipping. Kemper has enough existing capacity to produce the 20,000 units.

Question a) Calculate the minimum selling price it should set to accept the order.

Question b) To increase its profitability by $40,000, Kemper should establish a selling price of (Calculate)

Reference no: EM132548006

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Calculate kemper should establish a selling price of

Reference no: EM132548006

Reference no: EM132548006

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