The Following Information Relates to a Product Produced by Ashland

question 73

Multiple Choice

The following information relates to a product produced by Ashland Company: Fixed selling costs are $1,000,000 per year.Variable selling costs of $4 per unit sold are added to cover the transportation cost.Although production capacity is 500,000 units per year,Ashland expects to produce only 400,000 units next year.The product normally sells for $40 each.A customer has offered to buy 60,000 units for $30 each.The customer will pay the transportation charge on the units purchased.If Ashland accepts the special order,the effect on income would be a

• A)$60,000 increase
• B)$180,000 increase
• C)$420,000 increase
• D)$600,000 decrease

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Definitions:

Bulimia

An eating disorder characterized by binge eating followed by purging to prevent weight gain.

Western Influence

describes the impact of Western cultures and societies on other regions in terms of lifestyle, technology, politics, economics, and culture.

Eat More

usually it's advice or marketing suggesting to increase consumption of certain foods, but without context, its meaning is too broad to define precisely.

Alone

The state of being completely separated from others, which can be experienced as a physical situation or an emotional condition.