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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
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b. | $100,000
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c. | $25,000
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d. | $125,000
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e. | $160,000 |
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