A Company Is Considering a Special Order for 2,000 Units

Multiple Choice

A company is considering a special order for 2,000 units to be priced at $18.90 (the normal price would be $21.50) .The order would require specialized materials costing $4.00 per unit.Direct labour and variable factory overhead would cost $2.15 per unit.Fixed factory overhead is $2.20 per unit.However,the company has excess capacity,and acceptance of the order would not raise total fixed factory overhead.The warehouse,however,would have to add capacity costing $2,600.Which of the following is relevant to the special order?

A) $2.20 fixed factory overhead per unit
B) $2.60 per unit of revenue
C) $18.90 selling price per unit of special order
D) $21.50 normal selling price