Bramble Corp. incurred the following costs for 58000 units: Variable costs$348000 Fixed costs392000 Bramble has received a special order from a foreign company for 2500 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $3000 for shipping. If Bramble wants to earn $5000 on the order, what should the unit price be

Bramble Corp.

If Bramble wants to earn $5000 on the order, the unit price should be:

$9.20.

Explanation:

a) Data and Calculations:

                                 Normal     Per Unit          Special

                             Production     Cost              Order

Production capacity = 58,000 units              2,500 units

Variable costs     $348,000      $6.00           $15,000 ($6 * 2,500)

Fixed costs           392,000       $6.76            0

Additional shipping                                         $3,000

Total costs         $740,000      $12.76           $18,000

Profit on special order                                      5,000

Total Sales revenue                                     $23,000

Unit price for special order ($23,000/2,500) $9.20

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