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Compute the minimum total sales revenue

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Question - Sireli Company makes and sells a product that regularly sell for $38.95 each. The following information is available for the current year:

Annual maximum capacity in units 6,500

Current annual production in units 6,200

Budgeted absorption cost per unit:

Direct materials $9.95

Direct labor $2.65

Manufacturing overhead (70% variable) $3.40

A new customer approached the company with a one-time all-or-nothing order for 900 units. The special-order units are identical to the regular ones, with one exception: the customer would like their business logo engraved on each unit. It will cost $2 to engrave the logo.

Required - Compute the minimum total sales revenue from the special order that would be acceptable to the company?

Reference no: EM132543076

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