It Costs Dryer Company $26 Per Unit ($18 Variable and $8

question 42

Multiple Choice

It costs Dryer Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. A foreign wholesaler offers to purchase 5,000 units at $21 each. Dryer would incur special shipping costs of $2 per unit if the order were accepted. Dryer has sufficient unused capacity to produce the 5,000 units. If the special order is accepted, what will be the effect on net income?

• A) $5,000 decrease
• B) $5,000 increase
• C) $15,000 increase
• D) $90,000 increase

Analyze variable pricing strategies, including quantity discounts and their impact on supply chain functionality.

Understand the rationale and impact of forward buying in supply chains.

Identify the benefits of supply chain coordination for maximizing total supply chain profits.

Understand the implications of replenishment order synchronization in multi-echelon supply chains.

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Definitions:

Significance Level

A threshold chosen by the researcher which determines the probability level below which the null hypothesis is rejected in hypothesis testing.

Mean Improvement

The average amount of change or increase, usually measured from a baseline in studies evaluating the effect of interventions.

Training Programs

Structured educational or skill development activities designed to enhance the knowledge, skills, and competencies of participants.

Coefficient of Determination

A statistical measure, usually denoted as R^2, indicating the proportion of variance in the dependent variable that is predictable from the independent variable(s).