Peach has received a special order for 10,000 units of its product. The product normally sells for $29 and has the following manufacturing costs:     Per unit Direct materials   $ 6 Direct labor     5 Variable manufacturing overhead     3 Fixed manufacturing overhead     11 Unit cost   $ 25   Assume that Peach has sufficient capacity to fill the order. What price should Peach charge to make a $10,000 incremental profit?   Multiple Choice   $25   $22   $29   $15

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 18E: A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price...
icon
Related questions
Question

 

Peach has received a special order for 10,000 units of its product. The product normally sells for $29 and has the following manufacturing costs:
 

  Per unit
Direct materials   $ 6
Direct labor     5
Variable manufacturing overhead     3
Fixed manufacturing overhead     11
Unit cost   $ 25
 


Assume that Peach has sufficient capacity to fill the order. What price should Peach charge to make a $10,000 incremental profit?

 

Multiple Choice

  •  
    $25
  •  
    $22
  •  

    $29

  •  
    $15
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Cost Sheet
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning