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Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special ...

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Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special ...

Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Zolas' Heaters has excess capacity. The following per unit data apply for sales to regular customers:

Direct materials$400
Direct manufacturing labor120
Variable manufacturing support60
Fixed manufacturing support200
Total manufacturing costs780
Markup (20% of total manufacturing costs)156
Estimated selling price$936

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

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Blondebombshell Author

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God bless you! Helped my grade so much.

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