1.

Assume that Melrose only has enough demand for Product C to sell 67,000 units to regular customers during the year. What is the relevant cost per unit of producing the special order for Moore?

		a. $42.60
		b. $44.00
		c. $40.80
		d. $39.40

2.

Assume that Melrose has enough demand for Product C to sell 72,000 units to regular customers during the year. If Moore Company offers to buy the special order units at $56 per unit, the effect of accepting the special order on Melrose's net income for the year will be a:

		a. $47,600 Increase
		b. $197,600 Increase
		c. $92,400 Increase
		d. $126,400 Increase

8 Use the following information for questions 12 and 13: The Melrose Company produces a single product, Product C. Melrose has the capacity to produce 80,000 units of Product Ceach year. If Melrose produces at capacity, the per unit costs to produce and sell one unit of Product C are as follows: Direct Materials $17 Direct Labor 11 Variable Factory Overhead 9 Variable Selling Expenses Fixed Factory Overhead 6 Fixed Selling Expenses 3 The regular selling price of one unit of Product C is $75. A special order has been received by Melrose from Moore Company to purchase 13,000 units of Product C during the year. If this special order is accepted, the variable selling expense on the order will be 70% less than on regular orders. Melrose, however, will need to purchase a specialized machine to engrave the Moore name on each unit of Product C in the special order. The machine will cost $18,200 and will have no use after the special order is filled