Bluebird Mfg

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) $33,750.
B) $38,750.
C) $45,000.
D) $11,250.
E) $7,500.