Boone Products Had the Following Unit Costs: a One-Time

question 37

Multiple Choice

Boone Products had the following unit costs: A one-time customer has offered to buy 2,000 units at a special price of $48 per unit. Because of capacity constraints, 1,000 units will need to be produced during overtime. Overtime premium is $8 per unit. How much additional profit or loss will be generated by accepting the special order?

• A) $30,000 loss
• B) $4,000 loss
• C) $24,000 loss
• D) $4,000 profit

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Definitions:

HDC Rights

Rights of a Holder in Due Course, which protect the holder of a negotiable instrument from certain defenses and claims that could invalidate the instrument.

Indorses

Signs or writes one's name on the back of (a document) to make it transferable or to add details, also referred to as endorsing.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future time.

Good Faith

A principle that implies honesty and sincerity of intention in the fulfillment of one's duties or negotiation.