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Diamond Boot Factory normally sells their specialty boots for $34 a pair. An offer to buy...

Diamond Boot Factory normally sells their specialty boots for $34 a pair. An offer to buy 70 boots for $28 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $13 and special stitching will add another $2 per pair to the cost. Determine the differential income or loss per pair of boots from selling to the organization. Enter the amount as a positive number.

Differential _____ per pair of boots from accepting the special order is $_____.

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Answer #1

Solution:

Differential income or loss per pair of boots from selling to the organization = Selling price of special order - Variable cost per boot - Special stitching per pair

= $28 - $13 - $2 = $13 per pair

Differential income per pair of boots from accepting the special order is $13

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