Jupiter Industries manufacturers ﬁshing poles speciﬁcally designed for deep water ﬁshing. Coastal Shores is one of Jupiter's key customers. Coastal would like to offer a pole at a highly discounted
Price as a special during an upcoming ﬁshing tournament. Coastal estimates that an additional 500
Poles can be sold provided the price is right. This sale is not expected to have much of an impact, if
Any, on the normal sales of the store. To determine the best price that they can offer to Coastal on
This order, Jupiter should calculate the _____.
A) Fixed cost per unit.
B) Average total cost.
C) Marginal cost.
D) Total cost.
E) Contribution margin.

Question

Quizplus · Accepted Answer

Jupiter should calculate the marginal cost, which will help them determine the additional cost of producing 500 more fishing poles. Based on this information, they can decide on a price that is lower than their usual selling price but still covers the additional cost of production.

Jupiter Industries Manufacturers ﬁShing Poles Speciﬁcally Designed for Deep Water