Elfalan Corporation Produces a Single Product

question 113

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 not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1,600 units for regular customers.The minimum acceptable price per unit for the special order is closest to:

• A) $62.00 per unit
• B) $50.70 per unit
• C) $67.80 per unit
• D) $50.31 per unit

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Definitions:

Active Memory

Memory that is currently being used or processed by the computer's CPU.

Code

Instructions written in a programming language to be executed by a computer.

Pretexting

The act of creating an invented scenario (the pretext) to convince someone to divulge information.

Polymorphic Virus

A type of malware that can alter its code or characteristics to evade detection by antivirus software, making it particularly difficult to combat.