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Violet has received a special order for 110 units of its product. The product normally sells for $2,900 and has the following manufacturing costs: Per

Violet has received a special order for 110 units of its product. The product normally sells for $2,900 and has the following manufacturing costs:

Per unit

Direct materials

$670

Direct labor

340

Variable manufacturing overhead

500

Fixed manufacturing overhead

1,120

Unit cost

$2,630

Assume that Violet has sufficient capacity to fill the order without harming normal production and sales. What minimum price should Violet charge to achieve a $13,200 incremental profit?

a.

$1,510

b.

$2,630

c.

$1,760

d.

$1,630

Potter has received a special order for 16,000 units of its product at a special price of $19. The product normally sells for $26 and has the following manufacturing costs:

Per unit

Direct materials

$9

Direct labor

6

Variable manufacturing overhead

3

Fixed manufacturing overhead

3

Unit cost

$21

Potter is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Potter accepts the order, what effect will the order have on the companys short-term profit?

a.

$96,000 increase

b.

$16,000 decrease

c.

$16,000 increase

d.

$112,000 decrease

Cranberry has received a special order for 130 units of its product at a special price of $1,700. The product normally sells for $2,200 and has the following manufacturing costs:

Per unit

Direct materials

$620

Direct labor

320

Variable manufacturing overhead

420

Fixed manufacturing overhead

520

Unit cost

$1,880

Assume that Cranberry has sufficient capacity to fill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the companys short-term profit?

a.

$44,200 increase

b.

$23,400 decrease

c.

$23,400 increase

d.

$67,600 decrease

Walnut has received a special order for 2,500 units of its product at a special price of $170. The product normally sells for $210 and has the following manufacturing costs:

Per unit

Direct materials

$62

Direct labor

30

Variable manufacturing overhead

40

Fixed manufacturing overhead

75

Unit cost

$207

Walnut is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Walnut accepts the order, what effect will the order have on the companys short-term profit?

a.

Zero

b.

$92,500 increase

c.

$100,000 decrease

d.

$92,500 decrease

Almond has received a special order for 13,000 units of its product at a special price of $56. The product normally sells for $67 and has the following manufacturing costs:

Per unit

Direct materials

$22

Direct labor

17

Variable manufacturing overhead

8

Fixed manufacturing overhead

9

Unit cost

$56

Assume that Almond has sufficient capacity to fill the order. If Almond accepts the order, what effect will the order have on the companys short-term profit?

a.

$143,000 increase

b.

$260,000 decrease

c.

$117,000 increase

d.

Zero

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