The Dolomite Division of Manila Bay Corp. produces a high-quality crushed synthetic Dolomite. Unit production costs (based on capacity production of 100,000 units per year) follow: Direct material $50...

Refer to Dolomite Division of Manila Bay Corp. Assume, for this question only, that the Dolomite Division is producing and selling at capacity. What is the minimum selling price that the division would consider on a "special order" of 1,000 Dolomites on which no variable period costs would be incurred?

Solution:

Direct Material       50

Direct Labor           20

Overhead                10

SG&A                        9

Opportunity Cost
 5

Total                         94