A Company Is Considering a Special Order for 1,000 Units

question 119

Multiple Choice

A company is considering a special order for 1,000 units to be priced at $8.90 (the normal price would be $11.50) .The order would require specialized materials costing $4.00 per unit.Direct labor and variable factory overhead would cost $2.15 per unit.Fixed factory overhead is $1.20 per unit.However, the company has excess capacity and acceptance of the order would not raise total fixed factory overhead.The warehouse, however, would have to add capacity costing $1,300.Which of the following is relevant to the special order?

• A) $11.50 normal selling price
• B) $1.20 fixed factory overhead per unit
• C) $7.35 spent on donuts and coffee
• D) $8.90 selling price per unit of special order
• E) None of these.

---

Definitions:

Ontological Depth

Refers to the complexity and richness of being or existence, often discussed in philosophical contexts regarding the nature of reality.

Structuration Theory

A social theory that posits that individuals and society shape each other through a dynamic and reciprocal process of actions and structures.

Substantive Rationality

A type of rationality that considers the values, ethics, and social implications of actions rather than merely focusing on the most efficient means to an end.

Formal Rationality

A decision-making process based on rules, regulations, and procedures, often associated with bureaucracy and organizational efficiency.