A company normally sells a product for $25 per unit. Variable per unit costs for this product are: $3 direct materials, $5 direct labor, and $2 variable overhead. The company is currently operating at 100% of capacity producing 30,000 units per year. Total fixed costs are $75,000 per year. The company should accept a special order for 1,000 units which would be sold for $13 per unit because the special order price exceeds variable costs.
Answer the following statement true (T) or false (F)
False
When a company is operating at full capacity, any special order whose selling price is less than the price for existing business should be rejected.
You might also like to view...
With regard to the terms quality control and quality assurance, ______.
A. there is no difference between the two terms B. quality assurance is the term we use today for what was formerly known as quality control C. quality control is concerned with the quality of a product or service after it is produced or delivered D. quality control is concerned with the application of government regulations governing quality
In today’s quickly changing business environment many organizations are focusing on designing their structure around processes rather than functions. These organizations are:
a. decentralized organizations b. virtual organizations c. adaptive organizations d. hierarchical organizations e. geographical organizations
The idea that new types of retailers begin as low-status, low-margin, low-price operators and then-if successful-evolve into more conventional retailers offering more services is called the
A. scrambled merchandising concept. B. wheel of retailing theory. C. pyramid concept. D. superstore concept. E. mass-merchandising concept.
Which of the following is NOT an example of secondary data?
A) White papers B) Published articles C) Online survey D) Focus group E) c and d