Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: Direct materials $2,300 Direct labor 960 Factory overhead (30% variable) 1,800 Selling expenses (50% variable) 900 Administrative expenses (10% variable) 840 Total per unit $6,800 Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order. If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit? Group of answer choices $4,064 $6,900 $4,514 $5,100
Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units: Direct materials $2,300 Direct labor 960 Factory overhead (30% variable) 1,800 Selling expenses (50% variable) 900 Administrative expenses (10% variable) 840 Total per unit $6,800 Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order. If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit? Group of answer choices $4,064 $6,900 $4,514 $5,100
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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Question
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Zildjian Corporation manufactures a single product with the following unit costs for 1,250 units:
| Direct materials |
$2,300 |
| Direct labor |
960 |
| Factory overhead (30% variable) |
1,800 |
| Selling expenses (50% variable) |
900 |
| Administrative expenses (10% variable) |
840 |
| Total per unit |
$6,800 |
Recently, a company approached Zildjian Corporation about buying 100 units for $5,100 each. Currently, the models are sold to dealers for $7,900. Zildjian Corporation's capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order.
If Zildjian Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?
Group of answer choices
$4,064
$6,900
$4,514
$5,100
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