Question - Farnsworth Television makes and sells portable television sets. Each television regularly sells for $370. The following cost data per television are based on a full capacity of 20,500 televisions produced each period:
Direct materials $70
Direct labor $55
Manufacturing overhead (75% variable, 25% unavoidable fixed) $40
A special order has been received by Farnsworth for a sale of 3,600 televisions to an overseas customer. The only selling costs that would be incurred on this order would be $15 per television for shipping. Farnsworth is now selling 8,600 televisions through regular distributors each period. What should be the minimum selling price per television in negotiating a price for this special order?
$170
$155
$370
$165