Reference no: EM133188309

Question - Kumander Daot, a manufacturer of computer peripherals, has excess capacity. The company's Davao plant has the following per-unit cost structure for item no. 89:

Variable manufacturing $50

Fixed manufacturing 15

Variable selling 8

Fixed selling 11

Traceable fixed administrative 4

Allocated administrative 2

The traceable fixed administrative cost was incurred at the Davao plant: in contrast, the allocated administrative cost represents a fair share of Kumander' corporate overhead. Utah has been presented with a special order of 5,000 units of item no. 89 on which no selling cost will be incurred. What the proper relevant cost in deciding whether to accept this special order?