A company is considering a special order for 1,000 units to be priced at $8.90 (the normal price would be $11.50). The order would require specialized materials costing $4.00 per unit. Direct labor and variable factory overhead would cost $2.15 per unit. Fixed factory overhead is $1.20 per unit. However, the company has excess capacity and acceptance of the order would not raise total fixed factory overhead. The warehouse, however, would have to add capacity costing $1,300. Which of the following is relevant to the special order?
a.$8.90 selling price per unit of special order
b.$1.20 fixed factory overhead per unit
c.$11.50 normal selling price
d.$7.35 spent on donuts and coffee
e. None of these choices are correct.
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