Landor Appliance Company makes and sells electric fans Each fan regularly sells

Question

Landor Appliance Company makes and sells electric fans Each fan regularly sells for $42. The following cost data per fan is based on a full capacity of 15 period Direct material cost per unit Direct labor cost per unit 8.00 9.00 10.00 Manufacturing overhead cost per unit A special order has been received by Landor for a sale of 25,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $4 per fan for shipping. Landor is now selling 120,000 fans through regular channels each period. What should Landor use as a minimum selling price per fan in negotiating a price for this special order? Minimum selling List the items to include in the calculation order

Explanation / Answer

Minimum Selling price: Material cost per unit 8 Labour cost per unit 9 Mannufacturing OH per unit 7 Selling cost per unit 4 Minimum Selling price 28

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