Additup Ltd Manufactures and Markets Pocket Calculators Which Sell at £22

Multiple Choice

Additup Ltd manufactures and markets pocket calculators which sell at £22 each. Current output is 40000 units per month, which represent 90% of the plants capacity. A new chain-store offers to buy up to 5000 calculators as a special order at £18 per unit and requires these immediately. These would sell under their own brand name. Total costs per month are £800000 of which £192000 are fixed costs. Assuming that the company maximises profits what is the profit made:

A) £272 532
B) £312000
C) £242 458
D) £204 432