Materials and labor are the only variable costs under what

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Reference no: EM13394942

Shareef's Window Company is in the process of preparing a production cost budget for August. Actual costs in July for 120 windows were:

Materials cost $ 4,800

Labor cost 3,000

Rent 1,500

Depreciation 2,500

Other fixed costs 3,200

Total $15,000

The company is currently producing and selling 144 windows annually and each window is sold for $140.00. The company is considering lowering the price to $125.00 for which management estimates this will increase sales to 200 windows. Materials and labor are the only variable costs. Under what situation should the company lower the price of its windows?

A. If total revenue exceeds totals costs under the new pricing

B. If incremental revenue exceeds the old revenue

C. If incremental profit is a positive number

D. If incremental costs decrease

Reference no: EM13394942

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