Louis industries normally produces and sells 5000 keyboards

Reference no: EM13569804

Louis Industries normally produces and sells 5,000 keyboards for personal computers each month. Variable manufacturing costs amount to $24 per unit, and fixed costs are $144,000 per month. The regular sales price of the keyboards is $85 per unit. Louis 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 Louis's regular sales volume or fixed manufacturing costs. On the basis of the above information only, which of the following is NOT true?

a.Neither the fixed manufacturing costs of $144,000 nor the variable manufacturing costs of $24 per unit is relevant to this decision regarding the special order.

b.At the 5,000-unit level of production, Louis's average cost per unit is $52.80.

c.It would not be profitable for Louis to consider the special order at a price less than $48 per unit.

d.At the 6,000-unit level of production, Louis's average cost per unit is $48.

Reference no: EM13569804

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