Author Question: Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are: ... (Read 105 times)

dmcintosh · **on:** Mar 6, 2021

Question 1

Which of the following is true of relevant information?
◦ All fixed costs are relevant.
◦ All Future revenues and expenses are relevant.
◦ Future
◦ All fixed costs are not relevant.

Question 2

Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are:

Direct materials

$6.00

Direct labor

5.00

Variable overhead

4.00

Fixed overhead

2.00

Marketing-fixed

6.00

Marketing/distribution-variable

4.60

Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram Corporation about purchasing 2,500 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Zephram's change in operating profits if the one-time-only special order is accepted?
◦ $11,000 increase
◦ $31,500 increase
◦ $22,500 increase
◦ $49,000 increase

mochi09 · **Reply #1 on:** Mar 6, 2021

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