Glow Sticks Corporation manufactures and sells glow-in-the-dark necklaces for $30 each. The company has the...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Glow Sticks Corporation manufactures and sells glow-in-the-dark necklaces for $30 each. The company has the capacity to produce 25,000 necklaces in a year, but is currently producing and selling 12,500 necklaces per year. The company currently is incurring the following costs at its current production level of 12,500 necklaces:
Variable manufacturing costs
$ 50,000
Fixed manufacturing costs
$ 90,000
Unavoidable Variable selling and administrative costs
$ 75,000
Fixed selling and administrative costs
$ 50,000
An amusement park is interested in purchasing 5,000 necklaces if it can receive a special price. This special order would not affect Glow Sticks Corporations regular sales or its cost structure. Glow Sticks Corporations profits would increase from this special order if the special order price per necklace is greater than:
A. $ 7.00
B. $ 8.00
C. $ 9.00
D. $ 10.00
E. Other $___________
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
