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Choice Foundations, Inc. produces and sells cosmetic products. Currently, the company is operating at 70% of its capacity. The sales price of its product is
Choice Foundations, Inc. produces and sells cosmetic products. Currently, the company is operating at 70% of its capacity. The sales price of its product is $30 per unit, and it incurs a full cost of $25 to produce each unit. Its yearly fixed manufacturing overhead amounts to $20,000. The company has received a one-time order for supplying 5,000 units at $26 per unit. This order can be executed within the excess production capacity and will not involve any additional fixed costs. To make this decision, the management of Foundations should use O A absorption costing as the decision is long-term in nature B. absorption costing as the decision is short-term in nature c. variable costing as the decision is long-term in nature D. variable costing as the decision is short-term in nature 4 da tif de
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