A Company Is Currently Operating at 70% Capacity Producing 8,000

question 59

Essay

A company is currently operating at 70% capacity producing 8,000 units.Cost information relating to this current production is shown in the following table:
$$\begin{array} { | l | r | } \hline & \text { Per Urit } \\\hline \text { Sales price } & \$ 15 \\\hline \text { Direct rraterial } & \$ 3.20 \\\hline \text { Direct labor } & \$ 7.10 \\\hline \begin{array} { l } \text { Variable } \\\text { overhead }\end{array} & \$ 0.05 \\\hline \text { Fixed overhead } & \$ 0.60 \\\hline\end{array}$$ The company has been approached by a customer with a request for a special order for 1,500 units.The sales price per unit for this special order is $10.Should the company accept the special order?

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Definitions:

Just Noticeable Difference

The minimal change in a stimulus that can just barely be detected by an organism.

Absolute Threshold

The lowest level of stimulation that a person can consciously detect 50 percent of the time the stimulation is present.

Stimulus

is any object or event that elicits a sensory or behavioral response in an organism.

Absolute Threshold

The minimum intensity of a stimulus required to be correctly detected at least 50% of the time.