Amaryliz Products Had the Following Unit Costs

question 48

Multiple Choice

Amaryliz Products had the following unit costs:

A one-time customer has offered to buy 4,000 units at a special price of $60 per unit.Because of capacity constraints, 1,000 units will need to be produced during overtime.Overtime premium is $15 per unit.How much additional profit or loss will be generated by accepting the special order?

• A) $60,000 profit
• B) $52,000 loss
• C) $27,000 loss
• D) $37,000 profit

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Definitions:

Inventory Management

The supervision and control of ordering, storing, and using a company's inventory to minimize costs and meet customer demand efficiently.

ABC Analysis

A method for dividing on-hand inventory into three classifications based on annual dollar volume.

Tightly Controlled

Describes systems or processes that are managed with strict regulations or rules to ensure desired outcomes.