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13. Samson Designers produces a lady's handbag that normally sells for $120. The company produces 800 units annually but has the capacity to produce 1,100

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13. Samson Designers produces a lady's handbag that normally sells for $120. The company produces 800 units annually but has the capacity to produce 1,100 units. An order from a customer has been received for 200 handbags at $85 each that would not disrupt current operations. Current costs for the handbag are as follows: Direct materials $23.00 Direct labor 45.00 Variable overhead 7.00 Fixed overhead 12.00 Total $87 .00 In addition, the customer would like to add a monogram to each bag which would require an additional $4 per bag in additional labor costs . Samson would also have to purchase a piece of equipment to create the monogram which would cost $800. This equipment would not have any other uses. Which statement is true with regard to this situation? A. Incremental revenues will exceed incremental costs by $400. B . Incremental revenues will exceed incremental costs by $1,200. C. Incremental costs will exceed incremental revenues by $1,200. D. Incremental costs will exceed incremental revenues by $2,000

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