A Company Normally Sells a Product for $25 Per Unit

question 95

True/False

A company normally sells a product for $25 per unit.Variable per unit costs for this product are: $3 direct materials,$5 direct labor,and $2 variable overhead.The company is currently operating at 100% of capacity producing 30,000 units per year.Total fixed costs are $75,000 per year.The company should accept a special order for 1,000 units which would be sold for $13 per unit because the special order price exceeds variable costs.

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Definitions:

External Forces

Elements outside an organization that can impact its performance and strategies, including economic trends, regulatory changes, and competitive pressures.

Transformational Change

A profound or radical change that fundamentally alters the culture, values, and operations of an organization.

Top-Down Approach

A management style or approach where decision-making and direction come from the top levels of leadership and flow downward through an organization.

Complacency

A state of self-satisfaction, often accompanied by unawareness of actual dangers or deficiencies, leading to a lack of motivation to improve.