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Wagner Company sells product A for $21 per unit. Wagner's unit product cost based on...

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Accounting

Wagner Company sells product A for $21 per unit. Wagner's unit product cost based on the full capacity of 200,000 units is as follows: Direct materials $4 Direct labour 5 Manufacturing overhead 6 Unit product cost $15 A special order offering to buy 20,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $2 per unit for shipping. Wagner has enough idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. Assume that direct labour is an avoidable cost in this decision. In negotiating a price for the special order, the minimum acceptable selling price per unit should be

options: $13 $15 $16 $17

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