Wagner Ltd Can Manufacture 490,000 Tennis Rackets a Year at a Variable

question 50

Multiple Choice

Wagner Ltd can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and fixed costs of $500,000. Wagner budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price. The relevant cost to Wagner of the special order is

• A) $1,500,000
• B) $1,450,000
• C) $1,625,000
• D) Some other amount

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Obstacles to communication that occur due to differences in interpretation of words or phrases.