Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost an average of $5 to make, including fixed costs

The monthly fixed costs are $18,000. Coyote has offered to buy 1.500 widgets (all or nothing) for $4 each.

The accountant has determined that the excess production (bevond capaciti can be accommodated in the short term b incurrina an Incremental (tixed) cost of $800

Should Coyote's offer be accepted?

Multiple Choice

Unable to derermine

Yes, because the contribution from the sale exceeds the incremental costs

Yes, because it makes $1 per unit in the short run

No, because it will lose $1 per unit

No, because the opportunity costs are less than the gains