Answer (B) is correct . With the assumption that idle capacity is sufficient to manufacture 2,000 extra units, the goal is to find a minimum price that will not affect the price or quantity of other units sold. This minimum price is equal to the sum of the variable costs, $205.
Answer (A) is incorrect because Ignoring the variable manufacturing overhead from total variable costs results in $155. Answer (C) is incorrect because This amount is total costs, not total variable costs. Answer (D) is incorrect because The normal selling price is $300.
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