CompuTronics,a manufacturer of computer peripherals,has excess capacity.The company's Utah plant has the following per-unit cost structure for item no.89:
The traceable fixed administrative cost was incurred at the Utah plant;in contrast,the allocated administrative cost represents a "fair share" of CompuTronics' corporate overhead.Utah has been presented with a special order of 5,000 units of item no.89 on which no selling cost will be incurred.The proper relevant cost in deciding whether to accept this special order would be:
A)$40.
B)$59.
C)$61.
D)$80.
E)some other amount.

Question

CompuTronics,a manufacturer of computer peripherals,has excess capacity.The company's Utah plant has the following per-unit cost structure for item no.89: 
The traceable fixed administrative cost was incurred at the Utah plant;in contrast,the allocated administrative cost represents a "fair share" of CompuTronics' corporate overhead.Utah has been presented with a special order of 5,000 units of item no.89 on which no selling cost will be incurred.The proper relevant cost in deciding whether to accept this special order would be:
A)$40. 
B)$59. 
C)$61. 
D)$80. 
E)some other amount.

Quizplus · Accepted Answer

The Answer of CompuTronics,a manufacturer of computer peripherals,has excess capacity.The company's Utah plant has the following per-unit cost structure for item no.89: 
The traceable fixed administrative cost was incurred at the Utah plant;in contrast,the allocated administrative cost represents a "fair share" of CompuTronics' corporate overhead.Utah has been presented with a special order of 5,000 units of item no.89 on which no selling cost will be incurred.The proper relevant cost in deciding whether to accept this special order would be:
A)$40. 
B)$59. 
C)$61. 
D)$80. 
E)some other amount.

CompuTronics,a Manufacturer of Computer Peripherals,has Excess Capacity