Cost Accounting Quiz
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DECISION MAKING USING COST INFORMATION
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Apex Industries is currently producing 95,000 units, with a total capacity of 100,000 units. A special order for 10,000 units at $22 per unit is being considered. Accepting the order would cause the factory's total electricity consumption to cross a threshold, increasing the variable utility cost from $2.00 per unit to $2.50 per unit for all 105,000 units produced. Other variable manufacturing costs (DM, DL) total $15 per unit. Regular sales are not affected. Fixed costs will not change.
What is the incremental income or loss from accepting the special order?
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