Boone Products Had the Following Unit Costs A One-Time Customer Has Offered to Buy 2,000 Units at

question 24

Multiple Choice

Boone Products had the following unit costs: $\begin{array}{llr} \text { Direct materials } &\$24\\ \text { Direct labour} &10\\ \text { Variable factory overhead} &8\\ \text {Fixed factory overhead (allocated) } &18\end{array}$

A one-time customer has offered to buy 2,000 units at a special price of $48 per unit.Because of capacity constraints,1,000 units will need to be produced during overtime.Overtime premium is $8 per unit.How much additional profit or loss will be generated by accepting the special order?

• A)$4,000 profit
• B)$4,000 loss
• C)$24,000 loss
• D)$30,000 loss

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Definitions:

Letters

Brief written messages sent to customers and other recipients outside an organization.

Customers

Individuals or entities that purchase goods or services from a business.

Topic

The overall subject of a message.

Main Idea

The central or most important point that a writer or speaker aims to communicate in a text or speech.