Question

A foreign company wants to purchase 2100 units at a special unit price of $25. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $4000 in order to stamp the foreign company’s name on the product. The incremental income (loss) from accepting the order is

Answer 1

The missing information in the question is;

The variable manufacturing cost per unit is $22 (including direct material,labor and variable overheads)

Step-by-step explanation:

Incremental sales 2,100*25 $52,500

Variable manufacturing cost 2100*22 ($46,200)

Stamping Machine for this order ($4,000)

Incremental income from accepting the order $2,300