A Company Normally Sells a Product for $25 Per Unit

question 95

True/False

A company normally sells a product for $25 per unit.Variable per unit costs for this product are: $3 direct materials,$5 direct labor,and $2 variable overhead.The company is currently operating at 100% of capacity producing 30,000 units per year.Total fixed costs are $75,000 per year.The company should accept a special order for 1,000 units which would be sold for $13 per unit because the special order price exceeds variable costs.

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Definitions:

Abnormal Decrease

A reduction in quantity or function below the normal or expected level.

Diabetes Mellitus

A metabolic disorder characterized by high blood sugar levels over a prolonged period due to insulin production deficiencies or action.

Glucose

A key simple sugar vital for energy in living organisms and involved in the composition of many carbohydrates.

Micturition

The process of urination or the act of emptying the bladder.