The Following Information Relates to a Product Produced by Ashland

question 47

Multiple Choice

The following information relates to a product produced by Ashland Company: Fixed selling costs are $1,000,000 per year.Although production capacity is 500,000 units per year,Ashland expects to produce only 400,000 units next year.The product normally sells for $80 each.A customer has offered to buy 60,000 units for $60 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)$120,000 increase
• B)$360,000 increase
• C)$840,000 increase
• D)$1,200,000 decrease

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Definitions:

Organizational Stakeholders

Individuals or groups with an interest or investment in the success and operations of an organization, such as employees, customers, and shareholders.

Flexible Working Hours

A work arrangement that allows employees to alter their workday start and finish times or work from different locations.

Environmental Uncertainty

The degree of unpredictability in an organization's external environment, affecting decision-making processes and strategies.

Sustainable Development

A development approach that meets the needs of the present without compromising the ability of future generations to meet their own needs.