Paradiso Company manufactures dolls that are sold to various distributors
The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year. The company has provided the following data for the year:
No. of units produced and sold 400,000 units
Sales price $40 per unit
Variable manufacturing costs $20 per unit
Fixed manufacturing costs $1,000,000 per year
Variable selling and administrative costs $5 per unit
Fixed selling and administrative costs $500,000 per year
Paradiso receives an offer to produce 6,000 dolls for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum sales price the company should accept for the order?
A) $15
B) $40
C) $20
D) $25
D
You might also like to view...
An important aspect of supervision is ________, which attempts to insure that the interviewers are strictly following the sampling plan rather than selecting sampling units based on convenience or accessibility
A) questionnaire design B) sequential coding C) sampling control D) pretesting E) insurance
In the Maslow hierarchy of needs, those needs which are basic to survival and which must be satisfied first are referred to as
A. social needs. B. self-actualization needs. C. personal needs. D. physiological needs. E. safety needs.
Which statement concerning the sales opportunity grid is not correct?
a. The sales opportunity grid includes such factors as sales, gross profit, and net profit. b. The sales opportunity grid assumes that all products have the same markup. c. The sales opportunity grid uses data on costs from direct product profitability. d. The sales opportunity grid measures a product's performance over multiple time periods.
Which of the following would be the BEST closing sentence in a bad-news message?
a. We understand your disappointment in this decision. b. Please do not hesitate to contact us again if you have any further questions. c. To see the video that discusses our two newest investment offers, just phone us at 555-1616 to request your copy. d. We trust you will continue to rely on Carson products in spite of this present difficult situation.