A Manufacturer Operating with Excess Capacity Has Been Asked to Fill

question 55

Multiple Choice

A manufacturer operating with excess capacity has been asked to fill a special order at $7.25 per unit. The regular price is $10 per unit. No other use of the currently idle capacity can be found. The manufacturer's usual variable costs per unit are $3.50 for direct materials, $2.00 for direct labour, $1.00 for variable overhead, and $0.50 for sales commission. No sales commission would be paid on this special order. The average fixed overhead cost per unit is $0.25.
Under the general decision rule, the minimum price per unit for this special order is:

• A) $7.25
• B) $6.50
• C) $7.00
• D) $7.50

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Definitions:

Application Letter

A written or electronic communication submitted for the purpose of applying for a job, program, or specific opportunity.

Job Opening

An available employment position within a company or organization.

Résumé

A document summarizing an individual's work experience, education, skills, and accomplishments for job applications.

Dressing

The process of applying a covering, typically to wounds for protection and healing, or the action of putting on clothes.