A Company Is Considering a Special Order for 1,000 Units

question 119

Multiple Choice

A company is considering a special order for 1,000 units to be priced at $8.90 (the normal price would be $11.50) .The order would require specialized materials costing $4.00 per unit.Direct labor and variable factory overhead would cost $2.15 per unit.Fixed factory overhead is $1.20 per unit.However, the company has excess capacity and acceptance of the order would not raise total fixed factory overhead.The warehouse, however, would have to add capacity costing $1,300.Which of the following is relevant to the special order?

• A) $11.50 normal selling price
• B) $1.20 fixed factory overhead per unit
• C) $7.35 spent on donuts and coffee
• D) $8.90 selling price per unit of special order
• E) None of these.

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Definitions:

Going Private

The process by which a publicly traded company is transformed into a privately held entity, often through the purchase of all outstanding shares.

Hostile Takeover

A takeover to which the management of the target corporation objects.

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Shiftan v. Morgan Joseph Holdings Inc.

A legal case reference, specific details may vary based on jurisdiction and legal context, indicating no general definition can be provided without additional context.