Augusta Company manufactures stereo components. One of its most popular products is the LoudBoom Speaker. Data concerning this product are given below: The above per unit data are based on annual production of 3,000 units of the component. The company has received a special, one-time-only order for 200 units of the speaker. There would be no selling expenses on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. Assuming that Augusta Company has excess capacity and can fill the order without any production disruptions, what is the minimum price per unit on the special order the company should charge?
A) $50.00
B) $19.60
C) $17.60
D) $22.30

Question

Augusta Company manufactures stereo components. One of its most popular products is the LoudBoom Speaker. Data concerning this product are given below:  The above per unit data are based on annual production of 3,000 units of the component. The company has received a special, one-time-only order for 200 units of the speaker. There would be no selling expenses on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. Assuming that Augusta Company has excess capacity and can fill the order without any production disruptions, what is the minimum price per unit on the special order the company should charge?
A) $50.00 
B) $19.60 
C) $17.60 
D) $22.30

Quizplus · Accepted Answer

The Answer of Augusta Company manufactures stereo components. One of its most popular products is the LoudBoom Speaker. Data concerning this product are given below:  The above per unit data are based on annual production of 3,000 units of the component. The company has received a special, one-time-only order for 200 units of the speaker. There would be no selling expenses on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. Assuming that Augusta Company has excess capacity and can fill the order without any production disruptions, what is the minimum price per unit on the special order the company should charge?
A) $50.00 
B) $19.60 
C) $17.60 
D) $22.30

Augusta Company Manufactures Stereo Components