Figure 9-6
the Following Information Relates to a Product Produced

question 73

Multiple Choice

Figure 9-6
The following information relates to a product produced by Creamer Company: $\begin{array}{lr}\text { Direct materials } & £ 24 \\\text { Direct labour } & 15 \\\text { Variable overhead } & 30 \\\text { Fixed overhead } & {18} \\\text { Unit cost } & £87\end{array}$ Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.
-Refer to Figure 9-6. If the firm produces the special order, the effect on income would be a

• A)£360,000 increase.
• B)£360,000 decrease.
• C)£540,000 increase.
• D)£540,000 decrease.

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Definitions:

Hofstede's Framework

A model developed by Geert Hofstede that analyzes cultural dimensions and their impact on organizational behavior and communication across different nations.

Individualism-collectivism

A dimension of cultural variation that contrasts the emphasis on personal achievements and rights (individualism) with the focus on group goals and interdependence (collectivism).

Comparative Management

The study of how management practices differ among countries and cultures.

Time Orientation

The degree to which a society emphasizes short-term or long-term goals.