Pamela in Bamplona Makes Bull-Repellent Scent According to a Traditional

question 12

Multiple Choice

Pamela in Bamplona makes bull-repellent scent according to a traditional Spanish recipe,which normally sells at €9 (Euros) per unit.Normal production volume is 10,000 ounces per month.Average cost is €5 per ounce,of which €2 is direct material and €1 is variable conversion cost.This product is seasonal.After July,demand for this product drops to 6,000 ounces monthly.In November,Umberto offers to buy 1,800 ounces for €8,100.If Pamela accepts the order,she must design a special label for Umberto at a cost of €800.Each label will cost 30 cents to make and apply. Now assume that the order is received in July,peak season.If Pamela accepts the order,she will turn away regular customers who order 800 ounces.Pamela should:

• A)reject the order,which loses €1,875
• B)reject the order as it is less than her cost
• C)accept the order if Umberto raises the price higher than €6.41/ounce
• D)accept the order if Umberto raises the price higher than €7.41/ounce
• E)accept the order if Umberto raises the price by at least $1/ounce

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Definitions:

Psychosocial Development

A concept introduced by Erik Erikson, referring to the growth and development of the individual’s psyche in and interaction with their social environment.

Initiative

A willingness to take charge or begin actions independently.

Guilt

An emotional state that arises from the realization or belief that one has committed an error, offense, or violated a moral standard.

Psychoanalytic Work

involves the application of psychoanalytic theories and techniques to explore and treat the unconscious motivations and conflicts underlying mental disorders.