Golden Generator Supply Is Approached by Mr If Golden Generator Supply Accepts the Order at $2640,what Is

question 70

Multiple Choice

Golden Generator Supply is approached by Mr.Stephen,a new customer,to fulfill a large one-time-only special order for a product similar to one offered to regular customers.Golden Generator Supply has excess capacity.The following per unit data apply for sales to regular customers:
$$\begin{array} { l l } \text { Direct materials } & \$ 1900.00 \\\text { Direct manufacturing labor } & 120.00 \\\text { Variable manufacturing support } & 210.00 \\\text { Fixed manufacturing support } & \underline { 170.00 } \\\quad \text { Total manufacturing costs } & 2400.00 \\\text { Markup (25\% of total manufacturing costs) } & \underline { 600.00 } \\\text { Estimated selling price } & \$ 3000.00\end{array}$$
If Golden Generator Supply accepts the order at $2640,what is the amount contributed towards fixed costs and profit on a sales order of 1600 units?

• A)$384,000
• B)$656,000
• C)$1,232,000
• D)$992,000

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Definitions:

TVC

Total Variable Cost, which refers to all costs that vary with the level of output in the production process.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Drone

A remotely operated or autonomous flying machine, known as an unmanned aerial vehicle (UAV), which follows flight paths programmed through software.

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the number of units produced.