Question 96. The company has received a special, one-time-only order for

96. The company has received a special, one-time-only order for 500 units of component P06. There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. However, assume that Younes has no excess capacity and this special order would require 30 minutes of the constraining resource, which could be used instead to produce products with a total contribution margin of $10,000. What is the minimum price per unit on the special order below which the company should not go?

A) $67

B) $103

C) $20

D) $83

97. Refer to the original data in the problem. What is the current contribution margin per unit for component P06 based on its selling price of $220 and its annual production of 4,000 units?

A) $51

B) $137

C) $169

D) $173

98. If the company accepts the special order, the effect on total operating income will be a:

A) $1,000 increase

B) $9,000 increase

C) $6,000 decrease

D) $8,000 increase

99. The company has 100 defective units of Product X left over from last year which will have to be sold as scrap at reduced prices. The sale of these units would have no effect on the company’s other sales. The cost figure that is relevant as a guide for setting a minimum price on these units is:

A) $7

B) $1

C) $19

D) $12

100. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $63.70 per unit. By how much would this special order increase (decrease) the company’s net operating income for the month?

A) $7,400

B) ($5,900)

C) $18,900

D) ($2,100)

101. Suppose the company is already operating at capacity when the special order is received from the overseas customer. What would be the opportunity cost of each unit delivered to the overseas customer?

A) $24.80

B) $6.80

C) $7.40

D) $5.30

102. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 400 units for regular customers. The minimum acceptable price per unit for the special order is closest to:

A) $56.00

B) $65.80

C) $71.10

D) $54.72

103. If the special order from Woolgar Symphony Orchestra is accepted, Bharu’s profits for the year w

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