EXERCISE 1–10 Differential Costs and Sunk Costs LO1–5 Refer to the data given in Exercise 1–7. Answer all questions independently.

Required:

1. What is the incremental manufacturing cost incurred if the company increases production from 20,000 to 20,001 units?

2. What is the incremental cost incurred if the company increases production and sales from 20,000 to 20,001 units?

3. Assume that Kubin Company produced 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges and expresses interest in buying the 200 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer?

4. Assume that Kubin Company produced 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges and expresses interest in buying the 200 extra units that have been produced by the company and that would otherwise remain unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer?