Reference no: EM132822808

Problem 1: A company incurs per-unit costs of $11 in variable costs and $4 in fixed costs to produce its main product, which sells for $24. A new customer in the market offers to purchase 2,500 units at $16 each. If the special offer is accepted and produced with unused capacity, what costs are relevant to the decision?

a) $5 per unit or $12,500 in total costs

b) $11 per unit or $27,500 in total costs

c) $15 per unit or $37,500 in total costs

d) $9 per unit or $22,500 in total costs