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Discuss how much is the minimum acceptable selling price

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Knox company sells its single product for $55.00 per unit.  unit product costs are as follows:

direct material             $14.00

direct labor                 $20.00

manufacturing            $3.00

total                            $37.00

A special order to purchase 15,000 was recently recived.  There is enough capacity tofill the order and filling this order would not disrupt current operations.  Knox company would incur an additional $2.00 per unit for additional labor costs due to a slight modification the buyer wants made to the original product.  One third of the manufacturing overhead costs is fixed and would be incurred no matter how many units are produced.  in negotiating a price, how much is the minimum acceptable selling price?

Reference no: EM131799704

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