Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000
Direct materials ........ $3.00
Direct labor ......... 2.25
Variable overhead ....... 1.15
Fixed overhead ......... 1.80
Total ............. $8.20
The customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $14,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be affected.
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Chapter # 13
Section: Multiple Choice Questions
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Question Posted: February 04, 2012 00:05:22