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String Corporation Can Manufacture 490,000 Tennis Rackets a Year at a Variable

Question 85

Multiple Choice

String Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and at the fixed costs of $500,000. String 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 String 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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