Memory Division of Missing Byte, Inc

question 117

Multiple Choice

Memory Division of Missing Byte, Inc. The Memory Division of Missing Byte, Inc. produces a high-quality computer chip. Unit production costs (based on capacity production of 100,000 units per year) follow:
Refer to Memory Division of Missing Byte, Inc. Assume, for this question only, that the Memory Division is presently operating at a level of 80,000 chips per year. Accepting a "special order" on 2,000 chips at $88 will

• A) increase total corporate profits by $4,000.
• B) increase total corporate profits by $20,000.
• C) decrease total corporate profits by $14,000.
• D) decrease total corporate profits by $24,000.

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Definitions:

Nominal Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, representing the actual annual cost of borrowing.

Compounded Quarterly

The process where interest is calculated and added to the principal sum of an investment or loan on a quarterly basis.

Lifetime Subscription

A one-time payment plan for a product or service that grants the subscriber access for the lifetime of the product or service.

Annually

Occurring once every year.