Lambda company produces a single product. the cost of producing and selling a single unit...
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Accounting
Lambda company produces a single product. the cost of producing and selling a single unit of this product at the company's normal activity level of 60,000 units per year is as follows:
Direct Materials
$6.10
Direct Labour
3.80
Variable manufacturing overhead
2.00
Fixed manufacturing overhead
4.20
Variable selling and admin expenses
2.50
Fixed selling and admin expenses
2.40
The normal selling price is $25 per unit. The company's capacity is 75,000 units per year. An order has been received from a mail-order house for 16,000 units. If Lambda accepts this special order what is the lost contribution of regular sales that would be forfeited?
A $8,900
B none of these
C $10,600
D $4,000
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