Quantum Manufactures Parts That Are Used in the Production of Washers

question 28

Multiple Choice

Quantum manufactures parts that are used in the production of washers and dryers. The following costs are associated with Part No. 41: $\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 60 \\\hline \text { Direct labour } & 29 \\\hline \text { Variable manufacturing overhead } & 32 \\\hline \text { Fixed manufacturing overhead } & 10 \\\hline \text { Variable selling costs } & 9 \\\hline\end{array}$ The company has received a special-order inquiry from an appliance manufacturer in Portugal for 16,000 units of Part No.41. A total of 30% of Quantum's fixed manufacturing overhead can be avoided on the order, and the variable selling costs per unit will amount to only $6. The minimum price that Quantum should charge the Portuguese manufacturer is:

• A)$127.
• B)$130.
• C)$134.
• D)$137.
• E)$140.

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Definitions:

Transfer Payments

Transactions where no goods or services are exchanged, involving the reallocation of money from one party to another, often by the government to support individuals or groups.

Government Purchases

Expenditures made by the government for goods and services that directly satisfy public needs or initiate government activities.

Social Security

A government program that provides pensions, disability insurance, and benefits to retirees, their dependents, and disabled workers.

Welfare Benefits

Government-provided assistance programs aimed at supporting the well-being of individuals and families in need.