Peters Company Produces a Product with the Following Unit Cost

question 8

Multiple Choice

Peters Company produces a product with the following unit cost.
Fixed selling costs are $600,000 per year and variable selling costs are $1.50 per unit sold.
Production capacity is 500,000 units per year. However, the company expects to produce only 300,000 units next year. The product normally sells for $15 each. A customer has offered to buy 150,000 units for $10 each. The units would be sold in an area outside the market area currently served.
-If the firm produces the special order, the effect on income would be

• A) $75,000 increase.
• B) $90,000 increase.
• C) $2,500 decrease.
• D) $12,500 decrease.

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Definitions:

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth or value.

Sociogram

A graphic representation of social links and interactions within a group, often used to identify relationships, social dynamics, or patterns of behavior.

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Characterized by a lack of steadiness or constancy, either emotionally, physically, or in terms of situations or conditions.

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The theory that an individual possesses different versions of self, which may emerge in various contexts or stages of life.