multiple choice question, choose only one answer

A firm make teapots. The material and labour cost of producing each teapot is 4.24. The fixed cost apportioned to each teapot is 6.21. The normal selling price of each teapot is 11.79. A special order for 118 teapots comes in and the buyer wants to pay 6.75 per teapot. Total fixed overheads will not change as a result of accepting the order. Which of the following statements is true? Select one: O a. The order should be accepted, as the firm would make a gain of 158.12 in total b. The order should be rejected, as the order price is less than the normal price. O c. The order should be accepted, as the firm would make a gain of 296.18 in total O d. The order should be rejected, as the firm would make a loss of 436.60 in total Bell Ltd absorbs overheads on the basis of labour hours (a blanket rate). The following information is available: Budgeted labour hours: 12550 Budgeted production: 6065 units Total budgeted direct costs: 40040 Budgeted fixed overhead costs: 15947 What is the overhead absorption rate per hour? Select one: O a. 4.46 per labour hour O b. 1.27 per labour hour O c. 9.23 per labour hour O d. 2.63 per labour hour A recycled plastic cutlery company has overheads of 985272. The company produces two products: knives and forks. The company uses traditional absorption costing to allocate overheads to its products based on labour minutes. Knife Fork Production 2196062 2280660 (units) Minutes per unit 0.5 0.2 Using traditional absorption costing based on labour minutes work out the overhead absorption rate per unit of Fork. (Round your answer to 2.d.p) Select one: a. 0.13 O b. 0.32 O c. 0.11 O d. 0.63 Bert is experiencing a short term cash deficit and is unfortunately in his overdraft. Which one of the following actions would NOT be appropriate to remedy this situation? Select one: O a. To negotiate a change in credit terms with his suppliers from one month to two month o b. To request an overdraft extension O c. To delay purchase of office equipment O d. To allow a change in credit terms for his customers from one month to two months