Boston Tile Company makes porcelain floor tiles. The normal selling price per tile is $3.50. Boston has excess production capacity for an additional 5,000 tiles, Fixed Manufacturing Costs at capacity of $15,000, and Total Variable Costs per tile are $2.15. Kait’s Hardware contacts Boston to order 3,000 tiles but wants a discount. There will be an additional $250 in Selling and Administrative Costs for this special order. At what amount should Boston Tile sell these 3,000 tiles to earn exactly $0.50 profit per tile?
