Farnsworth Television Makes and Sells Portable Television Sets

question 68

Multiple Choice

Farnsworth Television makes and sells portable television sets.Each television regularly sells for $200.The following cost data per television are based on a full capacity of 12,000 televisions produced each period:
A special order has been received by Farnsworth for a sale of 2,500 televisions to an overseas customer.The only selling costs that would be incurred on this order would be $10 per television for shipping.Farnsworth is now selling 7,200 televisions through regular distributors each period.What should be the minimum selling price per television in negotiating a price for this special order?

• A)$200
• B)$166
• C)$178
• D)$176

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Definitions:

Dividend Stream

The flow of dividend payments issued by a company to its shareholders over time, reflecting the firm's profitability and policy on income distribution.

Dividend Policy

A company's approach to distributing profits back to its shareholders in the form of dividends.

Clientele Effect

A phenomenon where the types of investors attracted to a company's stock are affected by the company's dividend policy or other financial strategies.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns, encompassing various types such as retail and institutional investors.