Answer Happy

c. Suppose there is not enough idle capacity to produceall of the units for the overseas customer and accepting thespecial order would require cutting back on production of 1,300units for regular customers. What would be the minimum acceptableprice per unit for the special order?
Question 3 (3 marks for each part) Algonquin Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 70,000 units per month is as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense The normal selling price of the product is $72.90 per unit. $29.60 5.8 2.5 17.2 1.8 6.7 An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.10 less per unit on this order than on normal sales. Direct labour is a variable cost in this company.