The Following Cost Information Pertained to the Violin Division of Stringing

question 11

Multiple Choice

The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units:Assume that the Violin Division was evaluating whether it would accept a special sales order for 10 violins at $390 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is:

• A) $330.
• B) $342.
• C) $390.
• D) $366.
• E) $354.

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Definitions:

Operating Expense

Operating expense includes all necessary expenditures that a business incurs as a result of performing its normal business operations, excluding the cost of goods sold.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and taxes.

Mark-up

The amount added to the cost price of goods to cover overhead and profit.

Unit Cost

The cost incurred to produce, store, or acquire one unit of a product or service.