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Old MathJax webview The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,400 units per month (which
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The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,400 units per month (which represents the company's capacity) Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed $ 2.40 $ 3.40 $ 1.90 $ 0.55 $ 3.40 $ 0.95 Present sales amount to 6,000 units per month. An order has been received from a customer in a foreign market for 2.400 units. The order would not affect regular sales. Total fixed costs, both manufacturing and selling and administrative, would not be affected by this order. The variable selling and administrative costs would have to be incurred for this special order as well as all other sales. Assume that direct labor is a variable cost Assume the company has 70 units left over from last year which have small defects and which will have to be sold at a reduced price for scrap. The sale of these defective units will have no effect on the company's other sales. Which of the following costs is relevant in this decision? The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,400 units per month (which represents the company's capacity) Manufacturing: Direct materials Direct labor $ 2.40 $ 3.40 $ 1.90 $ 0.55 Variable overhead Fixed overhead Selling and administrative: Variable Fixed $ 3.40 $ 0.95 Present sales amount to 6.000 units per month an order has been received from a customer in a foreign market for 2,400 units The order would not affect regu administrative, would not be affected by this order. The variable selling and administrative costs would have to be incurred for this special order as well as all ott- Assume the company has 70 units left over from last year which have small defects and which will have to be sold at a reduced price for scrap. The sale of these of the following costs is relevant in this decision? Multiple Choice $8.25 unit product cost $1260 full cost $3.40 vartable selling and administrative cost $770 variable manufacturing cost
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