The following information relates to a product produced by Marigold Company:

Fixed selling costs are $650,000 per year, and variable selling costs are $10 per unit sold.Although production capacity is 400,000 units per year, the company expects to produce only 250,000 units next year.The product normally sells for $100 each.A customer has offered to buy 40,000 units for $80 each.
The incremental cost per unit associated with the special order is:
A) $76.
B) $60.
C) $90.
D) $84.

Question

The following information relates to a product produced by Marigold Company:  
 
  Fixed selling costs are $650,000 per year, and variable selling costs are $10 per unit sold.Although production capacity is 400,000 units per year, the company expects to produce only 250,000 units next year.The product normally sells for $100 each.A customer has offered to buy 40,000 units for $80 each.
The incremental cost per unit associated with the special order is:
A) $76. 
B) $60. 
C) $90. 
D) $84.

Quizplus · Accepted Answer

11ea8a4c_48a9_dac7_a0e6_19fd7ec9eeb2_TB5550_00

The Following Information Relates to a Product Produced by Marigold