RevampScamp turns regular Scamp trailers (very lightweight camping trailers) into fancy, high-end travel trailers. RevampScamp's relevant range of production is 120 – 240 units. When it produces and sells 140 units, its average costs per unit are as follows: Average Cost Per Unit $20,000 Direct Materials Direct Labor $3,000 Variable Manufacturing Overhead Fixed Manufacturing Overhead Fixed Selling Expense Fixed Administrative Expense $2,000 $1,000 $500 $250 Sales Commissions $750 Variable Administrative Expense $200 Assume RevampScamp has produced 220 units and expects to sell 205 of them. If a new customer expresses interest in buying 5 extra units that have been produced and would otherwise remain unsold, what is the total incremental cost incurred to sell these units to the customer? Multiple Choice $13,300 $3,800 $389,250 $14,250

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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RevampScamp turns regular Scamp trailers (very lightweight camping trailers) into fancy, high-end travel trailers. RevampScamp's relevant
range of production is 120 – 240 units. When it produces and sells 140 units, its average costs per unit are as follows:
Average Cost Per Unit
Direct Materials
Direct Labor
$20,000
$3,000
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Fixed Selling Expense
Fixed Administrative Expense
$2,000
$1,000
$500
$250
Sales Commissions
$750
Variable Administrative Expense
Assume RevampScamp has produced 220 units and expects to sell 205 of them. If a new customer expresses interest in buying 5 extra units
$200
that have been produced and would otherwise remain unsold, what is the total incremental cost incurred to sell these units to the customer?
Multiple Choice
$13,300
$3,800
$389,250
$14.250
Transcribed Image Text:RevampScamp turns regular Scamp trailers (very lightweight camping trailers) into fancy, high-end travel trailers. RevampScamp's relevant range of production is 120 – 240 units. When it produces and sells 140 units, its average costs per unit are as follows: Average Cost Per Unit Direct Materials Direct Labor $20,000 $3,000 Variable Manufacturing Overhead Fixed Manufacturing Overhead Fixed Selling Expense Fixed Administrative Expense $2,000 $1,000 $500 $250 Sales Commissions $750 Variable Administrative Expense Assume RevampScamp has produced 220 units and expects to sell 205 of them. If a new customer expresses interest in buying 5 extra units $200 that have been produced and would otherwise remain unsold, what is the total incremental cost incurred to sell these units to the customer? Multiple Choice $13,300 $3,800 $389,250 $14.250
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