The Following Information Relates to a Product Produced by Creamer

question 88

Multiple Choice

The following information relates to a product produced by Creamer Company: $\begin{array}{lr}\text { Direct materials } & \$ 24 \\\text { Direct labour } & 15 \\\text { Variable overhead } & 30 \\\text { Fixed overhead } & 18 \\\text { Unit cost } & \$ 87\end{array}$ 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.
What is the incremental cost per unit associated with the special order?

• A)$64
• B)$69
• C)$81
• D)$84

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Definitions:

Frontotemporal dementia

A form of dementia characterized by progressive degeneration of the frontal and/or temporal lobes of the brain, affecting personality, behavior, and language.

Prodromal period

The phase early in the development of a disease, showing initial symptoms but not yet the full-blown clinical picture.

Cognitive stimulation

Engagement in activities that challenge and develop cognitive abilities, such as thinking, memory, and problem-solving.