Seville Company Manufactures a Product with a Unit Variable Cost

question 37

Multiple Choice

Seville Company manufactures a product with a unit variable cost of $42 and a unit sales price of $75.Fixed manufacturing costs were $80,000 when 10,000 units were produced and sold, equating to $8 per unit.The company has a one-time opportunity to sell an additional 1,500 units at $55 each in an international market which would not affect its present sales.The company has sufficient capacity to produce the additional units.How much is the relevant income effect of accepting the special order?

• A)$63,000
• B)$7,500
• C)$50,000
• D)$19,500

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Definitions:

Egocentric Thinking

Egocentric thinking refers to an individual's tendency to perceive, understand, and interpret the world primarily from their own perspective without considering others' viewpoints.

Manipulation

Manipulation involves skillfully or unfairly controlling or influencing others to your advantage, often without their knowledge or consent.

Transductive Reasoning

Reasoning from the specific to the specific. (In deductive reasoning, one reasons from the general to the specific; in inductive reasoning, one reasons from the specific to the general.)

Memory

The processes by which we store and retrieve information.