Question

Diamond Boot Factory normally sells its specialty boots for $22 a pair. An offer to buy 100 boots for $15 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $9, and special stitching will add another $1 per pair to the cost.

Determine the differential income or loss per pair of boots from selling to the organization.

Answer 1

Answer: $5.00

Step-by-step explanation:

Differential income per pair is:

= Revenue per pair - Total cost per pair

= Selling price of pair - (Variable cost + Additional stitching cost)

= 15 - (9 + 1)

= 15 - 10

= $5.00