Kitchens Sales Inc

question 80

Multiple Choice

Kitchens Sales Inc.is approached by Mr.Louis Cifer,a new customer,to fulfill a large one-time-only special order for a product similar to one offered to regular customers.The following per unit data apply for sales to regular customers:

Kitchens Sales inc.has excess capacity.Mr.Cifer wants the cabinets in cherry rather than oak,so direct material costs will increase by $65 per unit.The average marketing cost of Kitchens Sales product is $175 per order.Which of the following costs is NOT considered to calculate the minimum acceptable price of a one-time-only special order?

• A)marketing costs
• B)direct material costs
• C)indirect material costs
• D)special design costs

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Definitions:

Similarity Error

An error in judgment where individuals assess others based on their own characteristics or beliefs, rather than objective criteria.

Person Perception

Involves the process by which individuals form impressions and make judgments about other people.

First-impression Error

The tendency to form lasting opinions about an individual or situation based on the initial impressions, which can often be inaccurate.

Negative Information

Data or facts that portray an adverse or unfavorable condition or aspect.