Question
Shriver Manufacturing Company produces computer components. The company's records reveal the following costs based on 100,000 units of production: Variable costs of $75 per unit
Shriver Manufacturing Company produces computer components. The company's records reveal the following costs based on 100,000 units of production: Variable costs of $75 per unit and fixed costs of $30 per unit. Although Shriver generally sells the components at a sales price of $165 per component, the manufacturer is considering whether to accept a special order for 5,000 components at a price of $135 per component. To satisfy the special order, 3,000 units of regular sales would have to be foregone. What is the opportunity cost associated with the special order?
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