Reference: 08-14
Wright Corporation's Contribution Format Income Statement for Last

question 112

Multiple Choice

Reference: 08-14
Wright Corporation's contribution format income statement for last month appears below. $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 45,000 \\\hline \text { Less variable expenses } & 27,000 \\\hline \text { Contribution margin } & 18,000 \\\hline \text { Less fixed expenses } & 12,000 \\\hline \text { Net income } & \$ 6,000 \\\hline\end{array}$$ There were no beginning or ending inventories. The company produced and sold 3,000 units during the month.
-The company has an opportunity to secure a special order of 800 units if it is willing to drop the selling price on these units to $13. Costs of securing the special order would be $1,000. The special order would not affect the company's regular sales. If the special order is accepted, the company's overall net income will:

• A)remain the same.
• B)increase $3,800.
• C)increase $3,200.
• D)increase $2,200.

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Definitions:

Customer Service

The assistance and advice provided by a company to those people who buy or use its products or services.

Work-in-process Inventory

Items that are in the process of being produced but are not yet finished goods in manufacturing.

Maintenance

The process of preserving the condition of tools, machines, buildings, and other physical assets through routine upkeep and repairs.

Repair

The process of fixing or restoring something that is broken or damaged.