Paragon Products Sells a Special Type of Navigation Equipment for $1,300.Variable

question 49

Multiple Choice

Paragon Products sells a special type of navigation equipment for $1,300.Variable costs are $800 per unit.When a special order arrived from a foreign contractor to buy 42 units at a reduced sales price of $900 per unit,there was a discussion among the managers.The controller said that as long as the special price was greater than the variable costs,the sale would contribute to the company's profits and should be accepted as offered.The vice president,however,decided to decline the order.Which of the following statements supports the decision of the vice president?

• A) The order is not likely to affect the regular sales.
• B) The company is operating at 70% of its production capacity.
• C) The variable costs of $800 includes variable costs of packing the product.
• D) The company will need to hire additional staff to execute this order.

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Definitions:

Stupa

A large, mound-shaped Buddhist shrine.

Yakshi

A female earth spirit, considered a symbol of fertility, depicted in ancient Indian sculpture and art.

Fertility

The natural or human-powered capability to produce offspring or yield crops; often symbolized in various forms of art and culture.

Vegetation

The plants and plant life of a region or environment, considered collectively.