CompuTronics,a Manufacturer of Computer Peripherals,has Excess Capacity

question 67

Multiple Choice

CompuTronics,a manufacturer of computer peripherals,has excess capacity.The company's Utah plant has the following per-unit cost structure for item no.89:
The traceable fixed administrative cost was incurred at the Utah plant;in contrast,the allocated administrative cost represents a "fair share" of CompuTronics' corporate overhead.Utah has been presented with a special order of 5,000 units of item no.89 on which no selling cost will be incurred.The proper relevant cost in deciding whether to accept this special order would be:

• A)$40.
• B)$59.
• C)$61.
• D)$80.
• E)some other amount.

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Definitions:

Average Inventory

The mean value of a company's inventory over a specific period of time, used to calculate cost of goods sold and other financial metrics.

Days In Inventory

Days in inventory is a financial metric that measures the average number of days a company holds inventory before selling it, indicating the efficiency of inventory management.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Dividend Yield

A metric indicating the annual dividends a firm distributes in relation to its share price.