i Secure https/ Help Save & Exit xam 3 Chapters 10-13 6 Landor Appliance Corpora
ID: 2593863 • Letter: I
Question
i Secure https/ Help Save & Exit xam 3 Chapters 10-13 6 Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $43. The following cost data per fan is based on a full capacity of 100,000 fans produced each period Direct materials Direct labor Manufacturing overhead (70% variable and 30% unavoidable fixed) Se s 7 0 oints 1042s A special order has been received by Landor for a sale of 15,000 fans to an overseas customer. The only selling costs that would on this order would be $5 per fan for shipping Landor is now selling 120,000 fans through regular channels each period Assume that direct labor is an avoidable cost in this decision. order? What should Landor use as a minimum selling price per fan in negotiating a price for this special Multiple Choice $23 per fan Prev 1° of 16111 Next >
Explanation / Answer
Ans: $ 28 per fan
Explanation:
Direct materials.................................................
$ 7
Direct labor........................................................
9
Variable manufacturing overhead ($10 × 0.70)
7
Variable selling cost..........................................
5
Minimum selling price.......................................
$28
Direct materials.................................................
$ 7
Direct labor........................................................
9
Variable manufacturing overhead ($10 × 0.70)
7
Variable selling cost..........................................
5
Minimum selling price.......................................
$28
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