A local science museum normally sells entry tickets for $6 each.The daily maximum capacity of the museum is 500 visitors.At the maximum capacity,fixed costs are $3 per visitor and variable costs are $.50 per visitor.A local school group has approached the museum wishing to purchase 25 special passes at a cost of $2.00 each.Assuming the museum has excess capacity,if the special order were accepted,net income would:

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Quizplus · Accepted Answer

The special order would increase net income by $37.50. This is because the variable cost per visitor is $0.50, so for 25 visitors, the total variable cost is $12.50 ($0.50 * 25). Selling 25 passes at $2.00 each generates $50.00 ($2.00 * 25). The increase in net income is the revenue from the special order minus the variable costs, which is $50.00 - $12.50 = $37.50. Fixed costs are not affected by the special order since the museum has excess capacity.

A Local Science Museum Normally Sells Entry Tickets for $6