JCN Industries normally produces and sells 5,000 keyboards for personal computers each month. Variable manufacturing costs amount to $25 per unit, and fixed costs are $146,000 per month. The regular sales price of the keyboards is $86 per unit. JCN has been approached by a foreign company that wants to purchase an additional 1,000 keyboards per month at a reduced price. Filling this special order would not affect JCN 's regular sales volume or fixed manufacturing costs.

On the basis of the above information only, which of the following is not true?

Multiple Choice

1. At the 6,000-unit level of production, JCN's average cost per unit is $49.33.

2. The fixed manufacturing costs of $146,000 are not relevant to this decision regarding the special order.

3. At the 5,000-unit level of production, JCN's average cost per unit is $54.20.

4. It would not be profitable for JCN to consider the special order at a price less than $49 per unit.

Answer rating: 100% (QA)

The statement that it would not be profitable for JCN to consider the ... View the full answer