Helmsman Products Sells a Special Type of Navigation Equipment for $1300.Variable

question 171

Multiple Choice

Helmsman Products sells a special type of navigation equipment for $1300.Variable costs are $800 per unit.When a special order arrived from a foreign contractor to buy 44 units at a reduced sales price of $900 per unit,there was a discussion among the managers.The controller said that as long as the special price was greater than the variable costs,the sale would contribute to the company's profits and should be accepted as offered.The vice president,however,decided to decline the order.Which of the following statements supports the decision of the vice president?

• A)The order is not likely to affect the regular sales.
• B)The company is operating at 70% of its production capacity.
• C)The variable costs of $800 include variable costs of packing the product.
• D)The company will need to hire additional staff to execute this order.

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Definitions:

Environment

The surrounding physical, chemical, and biological factors and conditions that influence the growth, development, and survival of organisms.

Behavior

The actions or reactions of an organism, often in response to its environment.

Altruistic Behavior

Occurs whenever a helping individual behaves in a way that benefits another individual at a cost to its own fitness.

Hamilton

A city in Ontario, Canada, known for its industrial heritage, or referring to William D. Hamilton, a biologist who made significant contributions to the theory of evolution.