Figure 9-6
The following information relates to a product produced by Creamer Company: $\begin{array}{lr}
\text { Direct materials } & £ 24 \
\text { Direct labour } & 15 \
\text { Variable overhead } & 30 \
\text { Fixed overhead } & {18} \
\text { Unit cost } & £87
\end{array}$ Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.
-Refer to Figure 9-6. The incremental cost per unit associated with the special order is
A)£84.
B)£81.
C)£69.
D)£64.

Question

Quizplus · Accepted Answer

The Answer of Figure 9-6
The following information relates to a product produced by Creamer Company: $\begin{array}{lr}
\text { Direct materials } & £ 24 \
\text { Direct labour } & 15 \
\text { Variable overhead } & 30 \
\text { Fixed overhead } & {18} \
\text { Unit cost } & £87
\end{array}$ Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.
-Refer to Figure 9-6. The incremental cost per unit associated with the special order is
A)£84.
B)£81.
C)£69.
D)£64.

Figure 9-6 the Following Information Relates to a Product Produced

Figure 9-6
the Following Information Relates to a Product Produced