Overhead (40% variable)
Cost to manufacture
Desired markup (50%)
Target selling price
The above cost information is based on 4,000 units. A foreign distributor has offered to buy 1,000 units at a price of $16 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional $1 per unit for the special order. If the special order is accepted, MNK’s operating profits will increase by:
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