Landor Appliance Corporation makes and sells electric fans. Eachfan regularly sells for $48. The following cost data per fan isbased on a full capacity of 151,000 fans produced each period.
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| Direct materials | $ | 7 |
| Direct labor | $ | 9 |
| Manufacturing overhead (50% variable and 50% unavoidablefixed) | $ | 6 |
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A special order has been received by Landor for a sale of 25,000fans to an overseas customer. The only selling costs that would beincurred on this order would be $6 per fan for shipping. Landor isnow selling 126,000 fans through regular channels each period.Assume that direct labor is an avoidable cost in this decision.What should Landor use as a minimum selling price per fan innegotiating a price for this special order?
