A Company Is Currently Operating at 60% Capacity Producing 10,000

Essay

A company is currently operating at 60% capacity producing 10,000 units.Cost information relating to this current production is shown in the following table:
$\begin{array}{|l|r|}\hline & \text { Per Unit } \\\hline \text { Sales price } & \$ 21 \\\hline \text { Direct material } & \$ 6 \\\hline \text { Direct labor } & \$ 4.12 \\\hline \begin{array}{l}\text { Variable } \\\text { overhead }\end{array} & \$ 2.23 \\\hline \text { Fixed overhead } & \$ 0.80\\\hline \end{array}$

The company has been approached by a customer with a request for a special order for 5,000 units.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?