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Compute the minimum price that is acceptable

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Question - The following are the details of a Product Zebra of Cross Roads Ltd.:

Particulars Rs. Selling price 300

Direct material 40

Direct labor 30

Variable manufacturing overhead 24

Fixed manufacturing overhead 60

Shipping and handling 6

Fixed selling costs 20

The company has received a special one-time order for 1,000 units of product Zebra. Assume that the company is operating at full capacity and that the contribution margin of the output that would be displaced by the special order is Rs. 20,000. Compute the minimum price that is acceptable for this one-time special order.

Reference no: EM132766256

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