Question

C. assume that you must decide quickly whether to accept a special one-time order for 1,000 units for $84 per unit. which income statement presents the most relevant data? answer variable costing determine the apparent profit or loss on the special order based solely on these data. use a negative sign with your answer if the special order creates an apparent loss. round answer to the nearest whole number. $answer 84000 d. if the ending inventory is destroyed by fire, which costing approach would you use as a basis for filing an insurance claim for the fire loss? why? select the most appropriate statement. absorption costing approach because the cost should include a reasonable portion of fixed manufacturing costs. variable costing approach because the cost should include a reasonable portion of fixed manufacturing costs.

Answer 1

At a quantity of 5 units and a selling price of $25 each, the company will experience a loss of $5. By comparing average cost and selling price, it is evident that the company is making losses. The marginal unit produced is also contributing to the overall losses.

Step-by-step explanation:

a. At a quantity of 5 units and a selling price of $25 each, the company's total revenue will be $125. However, the total cost of producing 5 units is $130, resulting in a loss of $5.

b. By comparing the average cost per unit and the selling price, you can determine whether the company is making or losing money. In this case, the average cost per unit is $26, which is greater than the selling price of $25, indicating that the company is making losses.

c. Since the marginal cost of producing the fifth unit is $30 and the selling price is $25, the marginal unit is adding to the company's losses. Therefore, the company should consider reducing its quantity produced to increase profits.