A Company Is Currently Operating at 75% Capacity and Producing

question 127

Multiple Choice

A company is currently operating at 75% capacity and producing 3,000 units. Current cost information relating to this production is shown in the table below: The company has been approached by a customer with a request for a 200-unit special order. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits?

• A) Any amount over $43 per unit.
• B) Any amount over $17 per unit.
• C) Any amount over $21 per unit.
• D) Any amount over $13 per unit.
• E) Any amount over $22 per unit.

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Definitions:

Real Property

Land and anything permanently attached to it, such as buildings, fences, and natural resources, recognized as a form of tangible assets.

Immovable Property

Property that cannot be moved, such as land and anything permanently affixed to it, like buildings.

Property Held In Fee

A form of ownership where the owner has complete control over the property and can use, enjoy, or dispose of it at will; often referred to as fee simple ownership.

Personal Property

Any movable property that is not affixed to real estate; includes goods, vehicles, jewelry, and intangible rights.