=+El2-12 Decision on accepting additional business Obj 1 V

a. Differential in¬

come, $112,000 Workman’s Denim Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $40,000, and variable costs are $24 per unit. The present selling price is $36 per unit. On January 18, 2008, the company received an offer from Marshall Company for 16,000 units ofthe product at $31 each. Marshall Company will market the units Differential Analysis and Product Pricing 465