Each month, Burrel Incorporated produces 500 units of a product. VC = $22 per unit. Total...
Each month, Burrel Incorporated produces 500 units of a product. VC = $22 per unit. Total FC's = $4,800. A special sales order is received for 200 units of the product at a price of $28 per unit. In deciding to accept of reject the special sales order, it is appropriate to consider the:
1. Difference between the offered price and the variable cost per unit.
2. New fixed cost per unit of $6.86
3. Current fixed cost per unit of $9.60
4. Difference between the two fixed costs per unit, or $2.74
Homework Answers
When Company receive special order within excess capacity then special order should be accept or reject it depend on difference between selling price and variable cost
Because Fixed cost will be remain fixed either special order should be accepted or not
So answer is 1) Difference between the offered price and the variable cost per unit
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Each month, Burrel Incorporated produces 500 units of a product.
VC = $22 per unit. Total...
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