Bluebird Mfg

question 121

Multiple Choice

Bluebird Mfg.has received a special one-time order for 15,000 bird feeders at $3 per unit.Bluebird currently produces and sells 75,000 units at $7.00 each.This level represents 80% of its capacity.These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels.Production costs for these units are $3.50 per unit,which includes $2.25 variable cost and $1.25 fixed cost.If Bluebird accepts this additional business,the incremental revenue will be:

• A)$45,000.
• B)$11,250.
• C)$33,750.
• D)$7,500.
• E)$26,250.

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Definitions:

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