Answer the following questions using the information below:
Rogers' Heaters is approached by Ms. Sushi, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Rogers' Heaters has excess capacity. The following per unit data apply for sales to regular customers:

-For Rogers' Heaters, what is the minimum acceptable price of this one-time-only special order?
A)$580
B)$780
C)$520
D)$1,014

Question

Answer the following questions using the information below:
Rogers' Heaters is approached by Ms. Sushi, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Rogers' Heaters has excess capacity. The following per unit data apply for sales to regular customers:
 
-For Rogers' Heaters, what is the minimum acceptable price of this one-time-only special order?
A)$580 
B)$780 
C)$520 
D)$1,014

Quizplus · Accepted Answer

To determine the minimum acceptable price of the one-time-only special order, we need to calculate the incremental cost per unit to produce the additional units. 
Incremental cost per unit = Total variable cost per unit for regular customers - Variable cost per unit for the special order
= $920 - $340
= $580

Therefore, the minimum acceptable price for the one-time-only special order is $580. Option A is the correct answer.

Answer the Following Questions Using the Information Below