Assume the Following Cost Data A Special Order for 100 Units Is Received

question 4

Multiple Choice

Assume the following cost data:
$\begin{array}{l}\text { Per-unit costs: }\\\begin{array} { l r } \text { Direct material } & \$ 6 \\\text { Direct labor } & \$ 4 \\\text { Variable overhead } & \$ 2 \\\text { Variable selling } & \$ 4 \\\text { Fxed overhead } & \$ 300 \\\text { Fxed selling } & \$ 400\end{array}\end{array}$
A special order for 100 units is received. The buyer wants his name stamped on each unit. This will increase labour costs by $1.00 per unit and cost $500 for the stamping machine. What price must be charged to earn $300 on the special order?

• A) $2,700
• B) $2,100
• C) $2,225
• D) $2,500

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Definitions:

Vitamins

Organic compounds that are essential in small amounts for the body to maintain health, usually obtained through diet.

Organic Substances

Compounds that contain carbon and are found in living organisms.

Essential

Necessary; when referring to blood pressure, indicates an elevation without apparent cause.

Hypokalemia

A medical condition characterized by low levels of potassium in the blood.