Rhand Company has received an offer to supply 2,000 units of Product A to Ray Company...
Rhand Company has received an offer to supply 2,000 units of
Product A to Ray Company at a selling price of$15.00 per unit.
Rhand company is already operating at full
capacity. Manufacturing costs per unit of Product A are as follows
–
Direct manufacturing costs $5.00
Variable manufacturing overheads $2.00
Fixed manufacturing overheads $3.00 (at full capacity of
10,000
units)
Variable selling costs $4.00
The firm currently sells its product in the regular market at
$20.00 per unit.
What is the opportunity cost to Rhand of selling the 2,000 units
to Ray?
a. $18,000
b. $12,000
c. $20,000
d. $22,000
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Rhand Company has received an offer to supply 2,000 units of
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