Each Month,Tuttle Corporation Produces 400 Units of a Product That

question 45

Multiple Choice

Each month,Tuttle Corporation produces 400 units of a product that has unit variable costs of $16.00.Total fixed costs for the month are $3,400.A special sales order is received for 100 units of the product at a price of $18 per unit.In deciding to accept or reject the special sales order,it is appropriate to consider the:

• A)new fixed cost per unit of $6.80.
• B)current fixed cost per unit of $8.50.
• C)difference between the offered price and the variable cost per unit,or $2.00.
• D)difference between the two fixed costs per unit,or $1.70.

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Definitions:

Cash Dividend

A payment made in cash to shareholders that is derived from a company's profits or reserves.

Times Interest Earned Ratio

A financial metric assessing a company’s ability to meet its interest obligations from its operating income.

Income Tax Payments

Income tax payments are the amounts of money a company or individual must pay to the government, based on the income earned over a tax period.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debts.