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The following information relates to a product produced by Davison Ltd: Direct materials Direct labour Variable overheads Fixed overheads Unit cost Fixed selling costs are

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The following information relates to a product produced by Davison Ltd: Direct materials Direct labour Variable overheads Fixed overheads Unit cost Fixed selling costs are S500,000 per year. Variable selling costs of $2 per unit sold are added to cover the transportation cost. Although production capacity is 500,000 units per year, Davison expects to produce only 400,000 units next year. The product normally sells for $50 each. A customer has offered to buy 50,000 units for $24 each. The customer will pay the transportation charge on the units purchased. Davison's incremental cost per unit associated with the special order is $5 6 $17 Select one $17 O $16 $15 O $13

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