Replica Products RP manufactures miniature models of airplanes, trains and
automobiles as promotional items for corporate customers. A newly formed airline
has approached RP to make models of its new livery logo design on a model
Boeing which it will send to travel agencies to serve as a marketing tool. RPs
current per unit cost on Boeing models is direct materials $; direct labour $;
variable manufacturing overhead $; fixed manufacturing overhead $ Such
models are normally priced at $unit Incorporating the new airline's livery
into the production will require an additional cost of $ As the newly formed
airline is rather cash poor, it is asking RP to make this onetime production run for
$ unit. Assuming RP has the capacity and other orders would not be affected,
how much total profit would RP earn from this special order?
a $
b $
c $
d $
