Use the Following Information for Questions
a Company's Unit $\begin{array}{l}\text { Variable costs }&\$75 \\\text { Fixed costs }&30\end{array}$

question 130

Multiple Choice

Use the following information for questions
A company's unit costs based on 100,000 units are: $\begin{array}{l}\text { Variable costs }&\$75 \\\text { Fixed costs }&30\end{array}$ The normal unit sales price per unit is $165. A special order from a foreign company has been received for 5,000 units at $135 a unit. In order to fulfill the order, 3,000 units of regular sales would have to be foregone.
-The opportunity cost associated with this order is

• A) $225,000.
• B) $495,000.
• C) $270,000.
• D) $405,000.

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Definitions:

Reduction Strategy

Approaches businesses use to downsize, reduce costs, or streamline operations, often involving layoffs or selling off assets.

Implications

The possible effects or consequences that may result from a particular action or decision.

Market Wage Rates

The prevailing pay scale for work in a particular industry, occupation, or region, determined by the supply and demand for labor in the market.

Forecasting

The process of making predictions about future events or trends based on historical data and analysis.