Pratt company is currently operating at a loss of 15000 the, Ask an Expert

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Pratt Company is currently operating at a loss of $15,000. The sales manager has received a special order for 5,000 units of product, which normally sells for $35 per unit. Costs associated with the product are: direct material, $6, direct labor, $10, variable overhead, $3, applied fixed overhead, $4; and variable selling expenses, $2. The special order would allow the use of a slightly lower grade of direct material, thereby lowering the price per unit by $1.50 and selling expenses would be decreased by $1. If Pratt wants this special order to increase the total net income for the firm to $10,000, what sales price must be quoted for each of the 5,000 units?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9990615

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