4. value 5.00 points Minor Electric has receved a special one-ume order for 900

Question

4. value 5.00 points Minor Electric has receved a special one-ume order for 900 light fixtures (units) at $16 per unit. Minor currently produces and sells 4,500 units at $1700 each. This level represents 75% of its capacity Production costs for these units are $21.00 per unit, which includes $14,00 varlable cost and $700 fixed cost. To produce the special order, a new machine needs to be purchased at o cost of $750 with a zero salvage value Management expects no other changes in costs as a result of the addiional production. If Minor wishes to eam $1,450 on the special order, the size of the order would need to be: O 56 units. O 1100 units O 2.200 units 4.400 units O 1036 units

Explanation / Answer

Ans: 1100 units

Explanation:

Total additional fixed cost + desired profit / Contribution margin per unit = Units to sell

= $750 + $1450 / ($16 - $14) = 1100 units

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