Question
Minor Electric has received a special one-time order for 900 light fixtures (units) at $16 per unit. Minor currently produces and sells 4,500 units at
Minor Electric has received a special one-time order for 900 light fixtures (units) at $16 per unit. Minor currently produces and sells 4,500 units at $17.00 each. This level represents 75% of its capacity. Production costs for these units are $21.00 per unit, which includes $14.00 variable cost and $7.00 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $750 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. If Minor wishes to earn $1,450 on the special order, the size of the order would need to be:
Multiple Choice
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1,100 units.
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1,036 units.
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4,400 units.
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2,200 units.
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56 units.
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