EMBRY MGMT 312 Final Exam
1. A company is currently operating at 80% capacity producing and 5,000 units. Current cost
information relating to this production is shown in the table below.
Per Unit
Sales Price $34
Direct material $2
Direct labor $3
Variable overhead $4
Fixed overhead $5
The company has been approached by a customer with a request for a 100-unit special order.
What is the minimum per unit sales price that management would accept for this order if the
company wishes to increase current profits?
Any amount over $34 per unit.
Any amount over $20 per unit.
Any amount over $14 per unit.
Any amount over $9 per unit.
Any amount over $5 per unit.
5,000/.80-5,000=1,250 unit capacity available $2+$3=$9 incremental costs
2. A cost that cannot be avoided or changed because it arises from a past decision, and is
irrelevant to future decisions, is called a(n):
1. A company is currently operating at 80% capacity producing and 5,000 units. Current cost
information relating to this production is shown in the table below.
Per Unit
Sales Price $34
Direct material $2
Direct labor $3
Variable overhead $4
Fixed overhead $5
The company has been approached by a customer with a request for a 100-unit special order.
What is the minimum per unit sales price that management would accept for this order if the
company wishes to increase current profits?
Any amount over $34 per unit.
Any amount over $20 per unit.
Any amount over $14 per unit.
Any amount over $9 per unit.
Any amount over $5 per unit.
5,000/.80-5,000=1,250 unit capacity available $2+$3=$9 incremental costs
2. A cost that cannot be avoided or changed because it arises from a past decision, and is
irrelevant to future decisions, is called a(n):
