Bellucci Corporation has provided the following information: The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):
A) $26.75
B) $12.80
C) $30.05
D) $24.50

Question

Bellucci Corporation has provided the following information:  The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):
A) $26.75 
B) $12.80 
C) $30.05 
D) $24.50

Quizplus · Accepted Answer

Since we are assuming the increase is still within the relevant range, we can use the variable cost per unit to calculate the incremental manufacturing cost.

Incremental cost = (Variable cost per unit) x (Increase in production)
Incremental cost = $1.60 x (9,001 – 9,000)
Incremental cost = $1.60 x 1
Incremental cost = $1.60

Therefore, the closest answer is B) $12.80.

Bellucci Corporation Has Provided the Following Information: the Incremental