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:

Discriminate Hiring

The practice of unfairly treating individuals differently in hiring based on characteristics such as race, gender, age, or religion, often leading to biased or unjust outcomes.

Job Stress

The harmful physical and emotional responses that occur when the requirements of a job do not match the capabilities, resources, or needs of the worker.

Isolation

The experience of being separated from others, which can be physical or emotional, leading to feelings of loneliness.

Work Overload

The condition of having more work tasks and responsibilities than can be managed within the allotted time, leading to stress and potential burnout.