Kandeed Co. sells product K for $30 per unit. Per unit costs of K are as follows

Question

Kandeed Co. sells product K for $30 per unit. Per unit costs of K are as follows:
Direct materials $6
Direct labor 7
Manufacturing overhead 12
Total $25
A special order to purchase 10,000 units was recently received. Kandeed has
enough capacity to fill the order, and filling the order would not disrupt current
production or sales of K. However, Kandeed would incur an additional $3 per unit
for shipping costs. Half of the manufacturing overhead costs are fixed and would be
incurred no matter how many units are produced. In negotiating a price for the special
order, what is the minimum acceptable selling price per unit?
A) $22
B) $28
C) $19
D) $25

Explanation / Answer

A)$22. the cost per unit is $6+$7+$6+$3=$22.

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