Reference: 09-03
Immanuel Company Has Just Obtained a Request for a Special

question 52

Multiple Choice

Reference: 09-03
Immanuel Company has just obtained a request for a special order of 6,000 jigs to be shipped at the end of the month at a selling price of $7 each. The company has a production capacity of 90,000 jigs per month with total fixed production costs of $144,000. At present, the company is selling 80,000 jigs per month through regular channels at a selling price of $11 each. For these regular sales, the cost for one jig is: $$\begin{array} { | l | c | } \hline \text { Variable production cost } & \$ 4.60 \\\hline \text { Fixed production cost } & 1.80 \\\hline \text { Variable selling expense } & 1.00 \\\hline\end{array}$$ If the special order is accepted, Immanuel will not incur any selling expense; however, it will incur shipping costs of $0.30 per unit.
-Suppose that regular sales of jigs total 85,000 units per month. All other conditions remain the same. If Immanuel accepts the special order, the change in monthly operating income will be?

• A)$14,400 increase.
• B)$7,200 increase.
• C)$5,400 decrease.
• D)$3,600 decrease.

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Definitions:

Custodial Parent

The parent who has been granted primary physical and/or legal custody of a child by a court.

Parenting Plan

is a document that divorcing or separated parents create to outline how their children will be raised and cared for, including custody arrangements and decision-making protocols.

Relocation

Relocation refers to the process of moving from one place to another, which can be due to various reasons such as employment opportunities, personal preference, or other life changes.

Parentifying Children

A dynamic where children are placed in adult roles, taking on emotional or physical responsibilities at a young age, often due to family dysfunction.