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Kumander Daot, a manufacturer of computer peripherals, has excess capacity. The company's Davao plant has the following per-unit cost structure for item no. 89: Variable
Kumander Daot, a manufacturer of computer peripherals, has excess capacity. The company's Davao plant has the following per-unit cost structure for item no. 89: Variable manufacturing $50 Fixed manufacturing 15 Variable selling 8 Fixed selling 11 Traceable xed administrative 4 Allocated administrative 2 The traceable xed administrative cost was incurred at the Davao plant: in contrast, the allocated administrative cost represents a "fair share" of Kumander' corporate overhead. Utah has been presented with a special order of 5,000 units of item no. 89 on which no selling cost will be incurred. The proper relevant cost in deciding whether to accept this special order would be: 040 050 0.51 080
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