High Seas Sail Makers manufactures sails for sailboats
The company has the capacity to produce 36,000 sails per year and is currently producing and selling 25,000 sails per year. The following information relates to current production:
Sales price per unit $175
Variable costs per unit:
Manufacturing $50
Selling and administrative $10
Total fixed costs:
Manufacturing $700,000
Selling and administrative $250,000
If a special pricing order is accepted for 5,700 sails at a sales price of $170 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income?
A) Operating income decreases by $627,000.
B) Operating income decreases by $684,000.
C) Operating income increases by $627,000.
D) Operating income increases by $684,000.
D .D)
Sales revenue (170 x 5,700 ) $969,000
Variable manufacturing costs (50 x 5,700 ) 285,000
Increase in operating income $684,000
You might also like to view...
________ refers to a contract provision that designates a certain state's law or country's law that will be applied in any dispute concerning nonperformance of the contract.
A. Choice of law clause B. Forum-shopping C. Arbitration clause D. Forum selection clause
An innovator is more likely to rely on information from an impersonal source (such as an article in a scientific magazine) than from a company's salesperson.
Answer the following statement true (T) or false (F)
The ________ spells out what kinds of marks including brand names can be protected and the exact method of protecting them.
A. Federal Fair Packaging and Labeling Act B. Wagner Act C. Licenses Act D. Magnuson-Moss Act E. Lanham Act
Do you think Tara has compromised her position with her boss or her client by saying what she did to Norma?
What will be an ideal response?