A Company's Unit Costs Based on 100,000 Units Are $\begin{array}{lr}\text { Variable costs } & \$ 75 \\\text { Fixed costs } & 30\end{array}$

question 129

Multiple Choice

A company's unit costs based on 100,000 units are: $\begin{array}{lr}\text { Variable costs } & \$ 75 \\\text { Fixed costs } & 30\end{array}$ The normal unit sales price per unit is $165.A special order from a foreign company has been received for 5,000 units at $135 a unit.In order to fulfill the order, 3,000 units of regular sales would have to be foregone.
-The opportunity cost associated with this order is

• A)$225,000.
• B)$495,000.
• C)$270,000.
• D)$405,000.

---

Definitions:

GAAP

Generally Accepted Accounting Principles; a collection of commonly followed accounting rules and standards for financial reporting in the United States.

FASB

The Financial Accounting Standards Board, which is responsible for establishing and improving standards of financial accounting and reporting for the private sector in the United States.

Higher Risk Securities

Investment products that offer potentially higher returns but come with an increased level of risk, including stocks or bonds from less stable companies.

Foreign Exchanges

The global market in which currencies are traded. This market determines the foreign exchange rates for every currency.