Problem
Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:
|
Domestic unit sales price
|
$22
|
|
Unit manufacturing costs:
|
|
|
Variable
|
11
|
|
Fixed
|
6
|
What is the differential cost from the acceptance of the offer?
a. $125,000
b. $550,000
c. $275,000
d. $150,000.