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What is the differential cost to abc company

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Reference no: EM132229187

Question - ABC Company receives a one-time special order for 5,000 units of Kleen. Acceptance of this order will not affect the regular sales of 80,000 units. The cost to manufacture one unit of this particular product is:

Variable costs (per unit) Fixed costs (per year)

Direct materials $1.50

Direct labor 2.50

Overhead 0.80 $100,000

Selling and administrative 3.00 50,000

Variable selling costs for each of these 5,000 units will be $1.00. What is the differential cost to ABC Company of accepting this special order?

A. $39,000

B. $34,000

C. $30,250

D. $29,000

Reference no: EM132229187

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