The Following Information Relates to the Jax Company for the Upcoming

question 80

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; however,Jax is operating at full capacity.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:

Relevant

Pertaining to decision-making, it refers to information or data that can influence the outcome of the decision.

Incurred Costs

Expenses that have been realized in the course of business operations.

Alternatives

Different options or choices available in a decision-making process.

Traceable

Costs or items that can be directly linked or attributed to a specific product, job, or department, facilitating accurate costing and financial analysis.