The Following Information Relates to the Jax Company for the Upcoming

question 69

Multiple Choice

The following information relates to the Jax Company for the upcoming year. The cost of goods sold includes $2,400,000 of fixed manufacturing overhead; the operating expenses include $200,000 of fixed marketing expenses.A special order offering to buy 50,000 units for $15.00 per unit has been made to Jax.Fortunately,there will be no additional operating expenses associated with the order and Jax has sufficient capacity to handle the order.How much will operating profits increase if Jax accepts the special order?

• A)$50,000
• B)$125,000
• C)$200,000
• D)$250,000
• E)Operating profits will not increase as a result of accepting the special order.

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Definitions:

Normal Distribution

A bell-shaped curve, which is symmetric about the mean, depicting the distribution of many types of data.

Standard Deviation

A statistical measurement of variance or dispersion within a dataset, indicating how spread out the numbers are from the mean.

Standard Error

The standard deviation of the sampling distribution of a statistic, commonly used as an estimate of the accuracy of a sample mean.

Sample Mean

The average of observations collected from a sample, used as an estimate of the population mean.