PRO Shops Has a Capacity of 45,000 Units and Is

question 97

Multiple Choice

PRO Shops has a capacity of 45,000 units and is currently producing and selling 40,000 at $25 a unit. The present cost structure, on a per unit basis, is: $$\begin{array} { l r } \text { Direct material } & \$ 10 \\\text { Direct labour } & 5 \\\text { Variable overhead } & 3 \\\text { Fixed overhead } & 4\end{array}$$ An order for 7,000 units has been received from a Japanese company at a price of $20 per unit. If the order is accepted, profit will:

• A) Decrease by $2,000
• B) Increase by $14,000
• C) Increase by $7,000
• D) Not change

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Definitions:

Delivery Rate

The speed or frequency with which something is delivered or supplied, often used in the context of goods, services, or information.

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Regulations and legislation designed to protect whales by prohibiting or limiting whaling activities.

Startling Fact

An unexpected or surprising piece of information that captures attention and can be used to emphasize the importance of a topic or argument.