Piersall Company Makes a Variety of Paper Products

question 151

Multiple Choice

Piersall Company makes a variety of paper products.One product is 20 lb copier paper,packaged 5,000 sheets to a box.One box normally sells for $18.A large bank offered to purchase 3,000 boxes at $14 per box.Costs per box are as follows: No variable marketing costs would be incurred on the order.The company is operating significantly below the maximum productive capacity.No fixed costs are avoidable.
Should Piersall accept the order?

• A)Yes,income will increase by $6,000
• B)Yes,income will increase by $9,000
• C)No,income will decrease by $3,000
• D)No,income will decrease by $6,000
• E)It doesn't matter; there will be no impact on income

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