Elfalan Corporation Produces a Single Product

question 8

Multiple Choice

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows: The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1,600 units for regular customers. The minimum acceptable price per unit for the special order is closest to: (Round your intermediate calculations to 2 decimal places.)

• A) $62.00 per unit
• B) $50.70 per unit
• C) $67.80 per unit
• D) $50.31 per unit

---

Definitions:

Grameen Bank

A microfinance organization and community development bank founded in Bangladesh that makes small loans to the impoverished without requiring collateral.

Microloans

Small, often short-term loans aimed at supporting small-scale enterprises or individuals who lack access to traditional banking services.

Bangladesh

A country in South Asia, recognized for its rich culture, history, and as a rapidly evolving economy.

Market Characteristics

Features or attributes of a market, including its size, growth rate, competitiveness, and customer demographics.