Forrest Corporation manufactures parts that are used in the production of washers and dryers. The...
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Accounting
Forrest Corporation manufactures parts that are used in the production of washers and dryers. The following costs are associated with part no. 65:
| Direct materials | $ | 50 | |
| Direct labor | 19 | ||
| Variable manufacturing overhead | 22 | ||
| Fixed manufacturing overhead | 15 | ||
| Variable selling costs | 11 | ||
The company received a special-order inquiry from an appliance manufacturer in Brazil for 15,000 units of part no. 65. The variable selling costs per unit will amount to only $8. Since Forrest has excess capacity, the minimum price that Forrest should charge the Brazil manufacturer is:
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