Mitch's Microbrew's regular selling price for a case of its product is $6.Variable costs are $4 per case.Fixed costs total $1 per case based on 100,000 cases,and remain unchanged within the relevant range of 50,000 cases to total capacity of 200,000 cases.After sales of 80,000 cases were projected for the year,a special order was received for an additional 10,000 cases.What is the minimum selling price for the special order?
A)$3.
B)$4.
C)$5.
D)$6.

Question

Quizplus · Accepted Answer

The minimum selling price for the special order would be $4, which covers the variable costs of $4 per case. Fixed costs are not considered for the special order pricing since they remain unchanged within the relevant range and are already covered by the regular sales.

Mitch's Microbrew's Regular Selling Price for a Case of Its