Boone Products Had the Following Unit Costs: a One-Time Customer

question 37

Multiple Choice

Boone Products had the following unit costs: A one-time customer has offered to buy 1,000 units at a special price of £48 per unit. Assuming that sufficient unused production capacity exists to produce the order and no regular customers will be affected by the order, how much additional profit (loss) will be generated from the special order?

• A) £12,000 loss
• B) £14,000 profit
• C) £48,000 profit
• D) £6,000 profit

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Definitions:

Outboard Motors

Outboard motors are a type of propulsion system for boats, typically mounted on the outside of the hull, used to steer and power a vessel.

Opportunity Cost

The advantages that a person, investor, or company forfeits when they opt for one option instead of another.

Outboard Motors

Engines mounted on the outside of the stern of a boat, used to propel the vessel through the water.

Opportunity Cost

The cost of forgone alternatives when one option is chosen over another.