A Customer Has Requested That Lewelling Corporation Fill a Special

question 72

Multiple Choice

A customer has requested that Lewelling Corporation fill a special order for 9,000 units of product S47 for $20.50 a unit.While the product would be modified slightly for the special order, product S47's normal unit product cost is $14.40: Assume that direct labor is a variable cost.The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like modifications made to product S47 that would increase the variable costs by $5.00 per unit and that would require an investment of $36,000 in special molds that would have no salvage value.This special order would have no effect on the company's other sales.The company has ample spare capacity for producing the special order.The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:

• A)$(9,900)
• B)$4,500
• C)$54,900
• D)$(26,100)

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Definitions:

Labour Market Scan

A process of examining and analyzing the current state of the job market to understand trends, job availability, salary ranges, and required skill sets.

Balfour Declaration

A statement from the British government in 1917 expressing support for the establishment of a "national home for the Jewish people" in Palestine, then an Ottoman region with a minority Jewish population.

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