For Rogers’ Heaters, what is the minimum acceptable price of this one-time-only special order?

ACCOUNTING

Multiple Choice

Rogers’ Heaters is approached by Ms. Yukki, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Rogers’ Heaters has excess capacity. The following per unit data apply for sales to regular customers:



Direct materials $200

Direct manufacturing labor 60

Variable manufacturing support 30

Fixed manufacturing support 100

Total manufacturing costs 390

Markup (30%) 117

Estimated selling price $507



For Rogers’ Heaters, what is the minimum acceptable price of this one-time-only special order?

a. $290

b. $390

c. $260

d. $507

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