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Wilmington Chemicals produces a chemical, PX44, which is used to retard fading in exterior house...

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Accounting

Wilmington Chemicals produces a chemical, PX44, which is used to retard fading in exterior house paint. In the past year, the company pro- duced 200,000 gallons at a total cost of $1,200,000 ($6 per gallon). The company is currently con- sidering an order for 15,000 gallons from a paint company in Canada. (To date, Wilmington has not sold the product in markets outside the United States.) Explain why the incremental cost associated with this order is likely to be less than $90,000.

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