1. Green Company makes a product, BG2. It has a production capacity of 1,000 units, and it can sell all of 1,000 units in the regular market. The regular selling price is $80 each.

   Green has received a request from Tom for a special order of 100 units of BG2. Tom wants to pay $ 45 per unit. No variable selling cost would be incurred for this order.

   The following is the per-unit cost information:

   Variable manufacturing	$23
   Fixed manufacturing	$15*
   Unit manufacturing cost	$38
   Variable selling	$3
   Fixed selling	$9*
   Unit selling cost	$12
   Total cost	$50

   * based on production and sales of 1,000 units

   If Green accepts Toms order, Green's income will be _____ than income associated with rejecting Tom's order.

   	A.	$2,500 higher
   	B.	$3,500 lower
   	C.	$3,200 lower
   	D.	$2,200 higher
   	E.	$5,000 lower

4 points

QUESTION 41

1. Use the information given in the above question. For the best interest of Green, what is the minimum price (per unit) that Green should charge to Tom?

   	A.	$23
   	B.	$50
   	C.	$26
   	D.	$77
   	E.	$80