The Following Information Relates to the Jasmine Company for the Upcoming

question 19

Multiple Choice

The following information relates to the Jasmine Company for the upcoming year:Sales
$\begin{array}{lrr}&\text { Amount}&\text { Per Unit}\\\text { Sales } & \$ 8,000,000 & \$ 20.00\\\text { Cost of goods sold } & \underline{6,400,000} & \underline{16.00 }\\\text { Gross margin } &1,600,000& 4.00 \\\text { Operating expenses } &\underline{ 600,000 }&\underline{ 1.50} \\\text { Operating profits } & \underline{ \$ 1,000,000} &\underline{ \$2.50}\end{array}$


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 Jasmine.
-Fortunately, there will be no additional operating expenses associated with the order; however, Jasmine is operating at full capacity. How much will operating profits increase if Jasmine accepts the special order?

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

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Definitions:

Communications Effort

The collective activities undertaken by an organization to promote, inform, or engage with its audience across various channels.

Internet Channel

A digital pathway through which products or services are sold or information is disseminated online.

Personalized Offerings

Products or services tailored to meet the specific needs or preferences of individual customers.

Convenience

The quality of being suitable or practical with minimal difficulty or effort; often an important factor in consumer decision-making.