The Following Information Relates to a Product Produced by Creamer

question 111

Multiple Choice

The following information relates to a product produced by Creamer Company: Fixed selling costs are $500,000 per year,and variable selling costs are $12 per unit sold.Although production capacity is 600,000 units per year,the company expects to produce only 400,000 units next year.The product normally sells for $120 each.A customer has offered to buy 60,000 units for $90 each.
The incremental cost per unit associated with the special order is

• A)$84.
• B)$81.
• C)$69.
• D)$64.

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Definitions:

Financial Markets

Platforms or systems that facilitate the buying, selling, and trading of financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.

Money Markets

Financial markets for short-term borrowing and lending, dealing with assets that mature in less than one year.

Capital Markets

Financial markets where debt or equity securities are traded, providing a mechanism for companies to raise long-term funds and investors to purchase securities.

Money Market Securities

Short-term financial instruments typically with high liquidity and minimal risk.