What is lowest selling price garland''s management accept


The management of Garland Inc. is considering whether ot not to accept a special sales order for 500 units of a product that it manufactures. Management has been provided the following data regarding the manufacturing and selling costs per unit:


Direct Materials:$225
Direct Labor:$195
Variable Manufacturing Overhead:$105
Fixed Manufacturing Overhead:$119
Variable Selling Costs:$75
Fixed Selling Costs:$25


Management has been informed that variable selling costs pertaining to the special order will be reduced by 20%. Management has also been informed that 250 units of sales to regular customers will be lost; the sales to regular customers create a contribution margin of $500 per unit. What is the lowest selling price that Garland's management would be willing to accept?

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