Acme Company manufactures widgets. Acme’s per-unit productio…
Acme Company manufactures widgets. Acme’s per-unit production costs are as follows: direct materials $84, direct labor $30, variable overhead $95, and fixed overhead $48. A customer has offered to buy a large number of customized units at a reduced price. The customization would require Acme to purchase special equipment that can only be used for the special order and has no resale value. Accepting the special order would not impact Acme’s selling and administrative expenses. Based the customer’s initial request to purchase 500 units, Acme’s accountant correctly determines that the minimum per-unit selling price is $245. At the last minute, the customer decides to increase the order to 1,000 units. What is the new minimum per-unit selling price that Acme must charge to break even on a special order of 1,000 units?
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