Wagner Company Sells Product a for $21 Per Unit A Special Order Offering to Buy 20,000 Units Has Been

Multiple Choice

Wagner Company sells Product A for $21 per unit.Wagner's unit product cost based on the full capacity of 200,000 units is as follows:
$$\begin{array} { | l | r | } \hline \text { Direct Materials } & \$ 4 \\\hline \text { Direct Labour } & \$ 5 \\\hline \text { Marufacturing Overhead } & \$ 6 \\\hline \text { Unit Product Cost } & \$ 15 \\\hline\end{array}$$
A special order offering to buy 20,000 units has been received from a foreign distributor.The only selling costs that would be incurred on this order would be $3 per unit for shipping.Wagner has sufficient idle capacity to manufacture the additional units.Two-thirds of the manufacturing overhead is fixed and would not be affected by this order.Assume that direct labour is an avoidable cost in this decision.In negotiating a price for the special order,what should be the minimum acceptable selling price per unit?

A) $14.
B) $15.
C) $16.
D) $18.