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Terak Ltd produces leather belts. The production capacity is 5,000 belts per month and it is currently selling 4,000 belts per month at $40 each.

Terak Ltd produces leather belts. The production capacity is 5,000 belts per month and it is currently selling 4,000 belts per month at $40 each. The variable costs to produce each belt is $25. A new customer offered to purchase an additional 1,000 belts at $30 each. What would be the incremental cost for Terak Ltd to sell 1,000 belts to the new customer?

a.

$30,000

b.

$100,000

c.

$25,000

d.

$125,000

e.

$160,000

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