Reggie Ltd Recently, a Company Approached Reggie Ltd

question 55

Multiple Choice

Reggie Ltd. manufactures a single product with the following unit costs for 1,000 units: $\begin{array}{lr}\text { Direct materials } & £ 2,400 \\\text { Direct labour } & 960 \\\text { Factory overhead (30\% variable) } & 1,800 \\\text { Selling expenses }(50 \% \text { variable) } & 900 \\\text { Administrative expenses (10\% variable }) & 840 \\\text { Total per unit } & \underline{£6,900}\end{array}$ Recently, a company approached Reggie Ltd. about buying 100 units for £5,100 each. Currently, the models are sold to dealers for £7,800. Assume there is additional capacity for 60 more units and the firm has to reduce regular customer sales by 40 units in order to contract the special order. There are selling expenses on only the sales to the regular customers. What is the net income if the special order of 100 units is accepted?

• A)£831,960
• B)£876,960
• C)£1,011,600
• D)£900,000

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Definitions:

Heterogeneity

The quality or state of being diverse and varied in composition, including differences in cultural, socioeconomic, and demographic characteristics among groups or individuals.

Cultural Differentialism

The belief or perspective that cultures are inherently different and should be recognized for their distinct qualities that set them apart from other cultures.

Multiculturalism

A policy or philosophy that promotes the recognition, acceptance, and preservation of different cultural identities within a society.

Grobalization

The process of global homogenization through which cultures, policies, and economic activities become integrated and uniform around the world. (Given the term seems to be a misspelling of "Globalization", this is an attempt to reinterpret it creatively.)