Mckerchie Inc

question 20

Multiple Choice

Mckerchie Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as G62. Data concerning this product are given below: The above per unit data are based on annual production of 9,000 units of the component. Direct labor can be considered to be a variable cost.
-The company has received a special,one-time-only order for 300 units of component G62.There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order.Assuming that Mckerchie has excess capacity and can fill the order without cutting back on the production of any product,what is the minimum price per unit on the special order below which the company should not go?

• A)$26
• B)$67
• C)$55
• D)$160

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Definitions:

Clayoquot Sound

A biologically rich region on the west coast of Vancouver Island, British Columbia, known for its large, intact temperate rainforests and biodiversity.

Resource Management

The strategic planning, allocation, and utilization of resources such as water, land, and energy in an efficient, sustainable, and responsible manner.

Forestry

The science and craft of creating, managing, using, and conserving forests and associated resources for human and environmental benefits.

Selective Cutting

A forestry practice where only certain trees are cut down, allowing for a mix of tree ages and types to remain, promoting a healthier forest.