The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,700 units per month (which represents the company's capacity): Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed Present sales amount to 6,100 units per month. An order has been received from a customer in a foreign market for 2,600 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. Multiple Choice Assume the company has 80 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? O O $3.60 variable selling and administrative cost $ 2.60 $ 3.60 $ 2.10 $ 0.65 $13.60 full cost $ 3.60 $ 1.05 $8.95 unit product cost

The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,700 units per month (which represents the company's capacity): Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed Present sales amount to 6,100 units per month. An order has been received from a customer in a foreign market for 2,600 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. Multiple Choice Assume the company has 80 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? O O $3.60 variable selling and administrative cost $ 2.60 $ 3.60 $ 2.10 $ 0.65 $13.60 full cost $ 3.60 $ 1.05 $8.95 unit product cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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