Minor Electric Has Received a Special One-Time Order for 1,500

question 112

Multiple Choice

Minor Electric has received a special one-time order for 1,500 light fixtures (units) at $5 per unit.Minor currently produces and sells 7,500 units at $6.00 each.This level represents 75% of its capacity.Production costs for these units are $4.50 per unit,which includes $3.00 variable cost and $1.50 fixed cost.To produce the special order,a new machine needs to be purchased at a cost of $1,000 with a zero salvage value.Management expects no other changes in costs as a result of the additional production.Should the company accept the special order?

• A)No,because additional production would exceed capacity.
• B)No,because incremental costs exceed incremental revenue.
• C)Yes,because incremental revenue exceeds incremental costs.
• D)Yes,because incremental costs exceed incremental revenues.
• E)No,because the incremental revenue is too low.

---

Definitions:

Organizational Values

Fundamental beliefs that guide the behaviors, decisions, and actions of an organization.

Group Leader

An individual tasked with overseeing and guiding the actions and development of a team or group to achieve specific objectives.

Cross-cultural Communication

The field of study concerned with how people from different cultural backgrounds communicate with each other and the strategies to improve these interactions.

Ethnic Identification

The process by which individuals identify with a particular ethnic group, influencing their sense of belonging and cultural practices.