How much net differential income or loss

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Reference no: EM13788188

Rumba Dance Hall has offered to buy from Muy Bueno Bakery 100 of their chocolate cakes for $25 each. No variable selling costs would need to be paid, but special packaging of $100 will have to be added. Normally, Muy Bueno sells their cakes at $35 each. Their costs per cake are: materials, $12; direct labor, $5; variable factory overhead, $3; fixed factory overhead, $2; and variable selling costs, $4. How much net differential income or loss will Muy Bueno make if they accept this offer?

a. $2,400

b. $200

c. $400

d. $2,500

Reference no: EM13788188

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