A Company Normally Sells a Product for $20 Per Unit

question 86

True/False

A company normally sells a product for $20 per unit.Variable per unit costs for this product are: $2 direct materials,$4 direct labor,and $1.50 variable overhead.The company is currently operating at 70% of capacity producing 14,000 units per year.Total fixed costs are $42,000 per year.The company should not accept a special order for 2,000 units which would be sold for $10 per unit because there would be an incremental loss on the order.

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Definitions:

Nomadic Lifestyle

A way of life characterized by moving from one place to another rather than settling permanently in one location, often for reasons such as following seasonal food sources or grazing lands for livestock.

Desert Ecosystem

A biome characterized by very low precipitation, extreme temperatures, and sparse vegetation, supporting a unique set of flora and fauna adapted to arid conditions.

Prickly Pear

A plant species belonging to the cactus family, known for its edible fruit and pads, and characterized by its spiky exterior.

Saguaro Cactus

A large, tree-sized cactus species native to the Sonoran Desert in the United States and Mexico, known for its towering, arm-like branches.