Figure 13-1. Fuller Company Makes Frames. a Customer Wants to Place a Place

question 84

Multiple Choice

Figure 13-1.
Fuller Company makes frames. A customer wants to place a special order for 600 frames in green with the company logo painted on the frame, to be priced at $40 each. Normally, Fuller would charge $90 per frame for this type of order. Fuller figures that wood and glass will cost $16 per frame, variable overhead (machining, electricity) is $4 per frame, direct labor is $12 per frame, and one setup will be required at $1,000 per setup. The set-up charge costs are 100% labor. Currently, the workers needed to set up for and make the frames are working at Fuller. Their wages will be paid whether or not the special order is accepted. Fuller's policy is to avoid layoffs to the extent possible.
-Refer to Figure 13-1. Which of the following is irrelevant to the special order decision?

• A) cost of wood and glass
• B) direct labor cost
• C) machining and electricity cost
• D) $40 price
• E) All of these are relevant.

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Definitions:

Friendly Employers

Employers who create a welcoming, supportive, and positive working environment for their employees, valuing their well-being and development.

Normal Distance

The average or typical spatial separation between individuals, likely within the context of social or interpersonal interactions.

Minority Position

A standpoint or perspective held by a smaller segment of a group, population, or society, which often contrasts with the majority opinion.

Logical Appeals

A method of persuasion based on evidence and reasoning, often used in rhetoric and argumentation.