Buxton Company Is Currently Operating at a Loss of $15,000

Multiple Choice

Buxton Company is currently operating at a loss of $15,000.The sales manager has received a special order for 5,000 units of product,which normally sells for $35 per unit.Costs associated with the product are: direct material,$6;direct labor,$10;variable overhead,$3;applied fixed overhead,$4;and variable selling expenses,$2.The special order would allow the use of a slightly lower grade of direct material,thereby lowering the price per unit by $1.50 and selling expenses would be decreased by $1.If Buxton wants this special order to increase the total net income for the firm to $10,000,what sales price must be quoted for each of the 5,000 units?

A) $23.50
B) $24.50
C) $27.50
D) $34.00