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

question 120

Multiple Choice

Assume the following cost data: $$\begin{array} { l l } \text { Per-unit costs: } & \\\text { Direct material } & \$ 6 \\\text { Direct labour } & \$ 4 \\\text { Variable overhead } & \$ 2 \\\text { Variable selling } & \$ 4 \\\text { Fixed overhead } & \$ 300 \\\text { Fixed selling } & \$ 400\end{array}$$ A special order for 100 units is received. The buyer wants his name stamped on each unit. This will increase labour costs by $0.25 per unit and cost $300 for the stamping machine. What price must be charged to earn $300 on the special order?

• A) $1,925
• B) $1,775
• C) $2,225
• D) $2,075

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Definitions:

Economy Moves

The dynamic changes and shifts in economic activity and trends over time, including growth, recession, and recovery phases.

Demand

The quantity of a product or service that consumers are willing and able to buy at a given price over a specified period.

Quantity Supplied

The complete quantity of a product or service that producers are prepared and can offer for sale at a certain price during a particular timeframe.

Economy Moves

Refers to changes or shifts in the economic activities and conditions within a country or region.