A company is currently operating at 75% capacity and producing 3,000 units.Current cost information relating to this production is shown in the table below: $$\begin{array} { | l | c | }
\hline & \text { Per Urit } \
\hline \text { Sales price } & \$ 43 \
\hline \text { Direct rraterial } & \$ 7 \
\hline \text { Direct labor } & \$ 6 \
\hline \begin{array} { l }
\text { Variable } \
\text { overhead }
\end{array} & \$ 4 \
\hline \text { Fixed overhead } & \$ 4 \
\hline
\end{array}$$ The company has been approached by a customer with a request for a 200-unit special.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?
A)Any amount over $43 per unit.
B)Any amount over $17 per unit.
C)Any amount over $21 per unit.
D)Any amount over $13 per unit.
E)Any amount over $22 per unit.

Question

A company is currently operating at 75% capacity and producing 3,000 units.Current cost information relating to this production is shown in the table below: $$\begin{array} { | l | c | } 
\hline & \text { Per Urit } \
\hline \text { Sales price } & \$ 43 \
\hline \text { Direct rraterial } & \$ 7 \
\hline \text { Direct labor } & \$ 6 \
\hline \begin{array} { l } 
\text { Variable } \
\text { overhead }
\end{array} & \$ 4 \
\hline \text { Fixed overhead } & \$ 4 \
\hline
\end{array}$$ The company has been approached by a customer with a request for a 200-unit special.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?
A)Any amount over $43 per unit.
B)Any amount over $17 per unit.
C)Any amount over $21 per unit.
D)Any amount over $13 per unit.
E)Any amount over $22 per unit.

Quizplus · Accepted Answer

The Answer of A company is currently operating at 75% capacity and producing 3,000 units.Current cost information relating to this production is shown in the table below: $$\begin{array} { | l | c | } 
\hline & \text { Per Urit } \
\hline \text { Sales price } & \$ 43 \
\hline \text { Direct rraterial } & \$ 7 \
\hline \text { Direct labor } & \$ 6 \
\hline \begin{array} { l } 
\text { Variable } \
\text { overhead }
\end{array} & \$ 4 \
\hline \text { Fixed overhead } & \$ 4 \
\hline
\end{array}$$ The company has been approached by a customer with a request for a 200-unit special.What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?
A)Any amount over $43 per unit.
B)Any amount over $17 per unit.
C)Any amount over $21 per unit.
D)Any amount over $13 per unit.
E)Any amount over $22 per unit.

A Company Is Currently Operating at 75% Capacity and Producing