4) Polar Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Polar Manufacturing has excess capacity

4) Polar Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Polar Manufacturing has excess capacity. The following per unit data apply for sales to regular customers:

Variable costs:

Direct materials $80

Direct labor 40

Manufacturing support 70

Marketing costs 30

Fixed costs:

Manufacturing support 90

Marketing costs 30

Total costs 340

Markup (50%) 170

Targeted selling price $510

For Polar Manufacturing, what is the minimum acceptable price of this special order?

A) $220

B) $290

C) $340

D $510

Leave a Comment