Question
Bluebird Mfg. has received a special one-time order for 11,000 bird feeders at $8 per unit. Bluebird currently produces and sells 72,000 units at $10
Bluebird Mfg. has received a special one-time order for 11,000 bird feeders at $8 per unit. Bluebird currently produces and sells 72,000 units at $10 each. This level represents 70% of its capacity. These bird feeders would be marketed under the wholesalers name and would not affect Bluebirds sales through its normal channels. Production costs for these units are $7.00 per unit, which includes $5.50 variable cost and $1.50 fixed cost. If Bluebird accepts this additional business, the incremental cost will be:
Multiple Choice
$61,875.
$4,000.
$60,500.
$27,500.
$88,000.
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