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Lambda 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
Lambda 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 60,000 units per year is as follows:
Direct Materials | $6.10 |
Direct Labour | 3.80 |
Variable manufacturing overhead | 2.00 |
Fixed manufacturing overhead | 4.20 |
Variable selling and admin expenses | 2.50 |
Fixed selling and admin expenses | 2.40 |
The normal selling price is $25 per unit. The company's capacity is 75,000 units per year. An order has been received from a mail-order house for 16,000 units. If Lambda accepts this special order what is the lost contribution of regular sales that would be forfeited?
A $8,900
B none of these
C $10,600
D $4,000
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