Question
Alex Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of
Alex Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 70,000 units per month is $50 variable cost and $16 fixed cost. Alex Company is currently producing and selling only 69,000 units at selling price $80 per unit. An order has been received from an overseas customer for 1,500 units to be delivered this month at price $65 per unit. If the special offer is accepted, the contribution margin lost of normal sales is:
Select one:
a. $15,000
b. Zero
c. $45,000
d. $22,500
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