Reggie Corporation manufactures a single product with the following unit costs for 1,000 units: Recently, a company approached Reggie Corporation about buying 100 units for $5,100 each.Currently, the models are sold to dealers for $7,800.Reggie Corporation's capacity is sufficient to produce the extra 100 units.No additional selling expenses would be incurred on the special order.
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If Reggie Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?
A) $4,014
B) $4,164
C) $5,100
D) $6,900

Question

Reggie Corporation manufactures a single product with the following unit costs for 1,000 units:  Recently, a company approached Reggie Corporation about buying 100 units for $5,100 each.Currently, the models are sold to dealers for $7,800.Reggie Corporation's capacity is sufficient to produce the extra 100 units.No additional selling expenses would be incurred on the special order.
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If Reggie Corporation wants to increase its profit by $18,000 on the special order, what is the minimum price it should charge per unit?
A) $4,014 
B) $4,164 
C) $5,100 
D) $6,900

Quizplus · Accepted Answer

To determine the minimum price per unit, Reggie Corporation needs to cover its costs and achieve the desired profit increase of $18,000. The choice B ($4,164) likely reflects the calculation that includes both the cost per unit and the additional profit margin required.

Reggie Corporation Manufactures a Single Product with the Following Unit