Black Tool Company Has a Production Capacity of 1500 Units

question 1

Multiple Choice

Black Tool Company has a production capacity of 1500 units per month,but current production is only 1250 units.The manufacturing costs are $70 per unit and marketing costs are $10 per unit.Doug Hall offers to purchase 250 units at $80 each for the next five months.Should Black accept the one-time-only special order if only absorption-costing data are available?

• A)No,since only the employees will benefit.
• B)No,the company will only break even.
• C)Yes,good customer relations are essential.
• D)Yes,since operating profits will most likely increase.

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Definitions:

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The legal rights to explore for and produce the minerals underneath a piece of land.

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An arrangement to secure a place or service in advance, such as a hotel room or a seat on a flight.

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A direction, usually written, by a qualified health-care professional for the preparation and use of a medicine or remedy.