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:

Failure

The condition or fact of not achieving a desired outcome or falling short in a particular endeavor or objective.

Altruism

The selfless concern for the well-being of others, often leading to voluntary actions intended to benefit others with no expectation of reward.

Entrepreneurship

The process of designing, launching, and running a new business or enterprise, often synonymous with taking financial risk for profit.

Achievement of Missions

The successful realization of organizational goals and objectives, particularly within the context of nonprofits and their dedication to specific causes or communities.