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What is the incremental cost associated with special order

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Reference no: EM132833081

Kyrie Inc. can make 10,000 banners per month. Kyrie can sell 9,000 banners per month to NBA fans for ?10 per banner. The company's costs per banner based on making 10,000 banners are:

Prime cost? 5.00

Overhead cost ? 3.00 overhead is 2/3 fixed at that volume

Problem 1: WBA offers to buy 1,000 banners with special WBA insignias for ?7 per banner. Printing the special insignias will cost Kyrie ?200. What is the incremental cost associated with this special order?

Reference no: EM132833081

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