Paradiso Company manufactures dolls that are sold to various distributors
The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year. The company has provided the following data for the year:
No. of units produced and sold 400,000 units
Sales price $40 per unit
Variable manufacturing costs $20 per unit
Fixed manufacturing costs $1,000,000 per year
Variable selling and administrative costs $5 per unit
Fixed selling and administrative costs $500,000 per year
Paradiso receives an offer to produce 6,000 dolls for a special event. This is a one-time opportunity during a period when the company has excess capacity. What is the minimum sales price the company should accept for the order?
A) $15
B) $40
C) $20
D) $25
D
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Broad-based interview questions are based on the theory that your past performance is the best indicator of your future behavior
Indicate whether this statement is true or false.