The Immanuel Company Has Just Obtained a Request for a Special

question 128

Multiple Choice

The Immanuel Company has just obtained a request for a special order of 6,000 jigs to be shipped at the end of the month at a selling price of $7 each. The company has a production capacity of 90,000 jigs per month with total fixed production costs of $144,000. At present, the company is selling 80,000 jigs per month through regular channels at a selling price of $11 each. For these regular sales, the cost for one jig is: If the special order is accepted, Immanuel will not incur any selling expense; however, it will incur shipping costs of $0.30 per unit. Total fixed production cost would not be affected by this order.
-At what selling price per unit should Immanuel be indifferent between accepting or rejecting the special offer?

• A)$7.40
• B)$7.70
• C)$6.40
• D)$4.90

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Definitions:

Crowd Formation

The process by which individuals come together to form a large group, often in response to an event, interest, or common goal.

Deindividuation

A psychological state where an individual loses self-awareness and personal accountability in groups, often leading to uncharacteristic behavior.

Zimbardo

Refers to Philip Zimbardo, a psychologist known for conducting the Stanford Prison Experiment, which explored the effects of perceived power and authority on behavior.

Input Variables

Factors or conditions that are manipulated or controlled in an experiment or study to observe their effect on the outcome.