The Average Total Cost of Producing Z-12 Is $35 Per

question 42

Multiple Choice

The average total cost of producing Z-12 is $35 per unit. The average variable cost associated with the production of Z-12 is $12 per unit, of which $2 is manufacturing overhead. The normal selling price of Z-12 is $50 per unit. If excess capacity exists, a special order for Z-12 will increase net operating income if it is priced at least:

• A) $50 per unit.
• B) $35 per unit.
• C) $12 per unit.
• D) $10 per unit.

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Definitions:

Satisfaction

A feeling of fulfillment or contentment resulting from achieving one's goals or desires.

Enjoy Doing

The feeling of pleasure or satisfaction experienced when engaging in an activity one likes or finds rewarding.

Make Living

involves earning enough income through work or business to cover personal and family expenses.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.