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Watches Inc. makes a watch selling for $50 per unit. Operating within its relevant range they have excess capacity to make 200,000 watches. The unit costs for financial statement purposes are $10 for direct materials, $7 for direct labor, $5 for variable overhead and $12 in fixed costs. The company has been offered a special order for 5,000 military watches that are identical to the current product but will require an additional $2 each for a special fitting. What is the incremental breakeven selling price per unit for the special order? a.$34 b.$24 c.$22 d. $39 e. None of the above values are correct. Using the information from the previous question, what should be the special order price per watch for the company to increase its' profits by $25,000?

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Accounting Basics, Accounting

Category:- Accounting Basics
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