Elfalan Corporation Produces a Single Product

question 43

Multiple Choice

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 80,000 units per month is as follows:
The normal selling price of the product is $67.80 per unit.
An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
-Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $60.60 per unit.The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:

• A) ($4,200)
• B) $84,300
• C) ($15,900)
• D) $27,300

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Definitions:

Point-Of-Purchase Displays

Marketing materials or advertising placed next to the merchandise it is promoting, typically found in retail environments.

Live Streaming

The real-time broadcasting of video content over the internet, allowing viewers to watch events as they happen.

Live Podcasts

Audio or video broadcasts streamed in real-time, allowing immediate interaction between the hosts and the audience.

Nonstore Retailing

Retail formats that allow consumers to purchase goods or services without visiting a traditional physical store location.