Problem 9 Newport Manufacturing makes and sells backyard fire pits. Each fire pi

Question

Problem 9 Newport Manufacturing makes and sells backyard fire pits. Each fire pit regularly sells for $269. The following cost data per unit are based on a full capacity of 3,000 fire pits produced each period. Direct material $100 Direct labor $75 Manufacturing overhead (75% variable) $64 Newport is negotiating a special order for the sale of 75 fire pits to an overseas customer. The only sell-ing cost that would be incurred on the special order would be a $10 sales commission. Newport is ex-pected to make 2,500 fire pits before the special order. Required: What is the minimum selling price Newport should negotiate for the special order?

Explanation / Answer

=100(DM)+52.5(VMO)+10(Commission) = 162.5

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