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

question 135

Multiple Choice

Boone Products had the following unit costs: A one-time customer has offered to buy 2,000 units at a special price of $48 per unit.Because of capacity constraints,1,000 units will need to be produced during overtime.Overtime premium is $8 per unit.Suppose the special order is accepted.How much additional profit (loss) will be generated?
$\begin{array}{lr}\text { Direct materials } & \$ 24 \\\text { Direct labour } & 10 \\\text { Variable factory overhead } & 8 \\\text { Fixed factory overhead (allocated) } & 18\end{array}$

• A)a $30,000 loss
• B)a $24,000 loss
• C)a $4,000 loss
• D)a $4,000 profit

---

Definitions:

Nonexecutive Personnel

Employees within an organization who do not hold executive or managerial positions, often involved in day-to-day operations.

Media Scandals

Events or actions that receive widespread public disapproval and are extensively covered and criticized in the media.

Compensating Salespeople

The practice of providing monetary and non-monetary rewards to sales staff for their performance and achievements.

Stock Ownership Incentive Plans

Programs designed to give employees the opportunity to buy or receive shares in the company they work for as a form of incentive.