Response to the following problem:
Bob Johnson, Inc., sells a lounging chair for $25 per unit. It incurs the following costs for the product: direct materials, $11; direct labor, $7; variable overhead, $2; and fixed overhead, $1. The company has received a special order for 50 chairs. The order would require rental of a special tool that rents for $300. Bob Johnson, Inc., has sufficient idle capacity to produce the chairs for this order.
Required:
Calculate the minimum price per chair that the company could charge for this special order if management requires a $500 minimum profit on any special order.