Question
Please answer quickly! Burns Industries currently manufactures and sells 20,000 power saws per month, although it has capacity to produce 35,000 units per month. at
Please answer quickly! Burns Industries currently manufactures and sells 20,000 power saws per month, although it has capacity to produce 35,000 units per month. at the 20,000-unit per month level of production, the per unit cost is $65, consisting of $40 in variable costs and $25 in fixed costs. Burns sells its saws to retail stores for $80 each. Allen distributors has offered to purchase 5,000 saws per month at a reduced price. Burns can manufacture these additional units with no charge in its present level of fixed manufacturing costs.
Refer to the information above. using an incremental analysis approach, Burns should consider accepting this special order only if the price per unit offered by Allen is at least:
a. $20
b. $50
c. $80
d. $40
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