The Mighty Music Company produces and sells a desktop speaker for $290. The company has the capacity to produce 69,000 speakers each period. At capacity, the costs assigned to each unit are as follows: Unit level costs $ 140 Product level costs $ 34 Facility level costs $ 24 The company has received a special order for 20,000 speakers. If this order is accepted, the company will have to spend $29,000 on additional costs to print a special logo. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order?

Respuesta :

Answer:

The correct answer is $141.45.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the selling price at indifferent points by using following formula:

Selling price at indifferent points = ( Additional cost ÷ units sold number) + Unit level Cost

By putting the value, we get

= ( $29,000 ÷ 20,000 ) + $140

= $1.45 + $140

= $141.45