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The Following Information Relates to a Product Produced by Creamer

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The following information relates to a product produced by Creamer Company: 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. 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


Definitions:

Industrial Patents

Legal documents granted to inventors or assignees that provide exclusive rights to use, make, and sell an invention for a set period of time.

Sync-Sound Technology

Technology used in filmmaking that synchronizes the audio recording with the motion picture image, allowing for sound and picture to be recorded simultaneously.

Motion Picture Patent Company

An early American film industry trust, formed in 1908, that held patents essential for movie production and sought to control film distribution.

National Board of Censorship

An early form of media regulation in the United States aiming to censor content deemed inappropriate, now known as the National Board of Review.

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