It Costs Lannon Fields $14 of Variable Costs and $6

question 3

Multiple Choice

It costs Lannon Fields $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30.A buyer in Mexico offers to purchase 3,000 units at $18 each.Lannon has excess capacity and can handle the additional production.What effect will acceptance of the offer have on net income?

• A)decrease $4,000
• B)increase $4,000
• C)increase $54,000
• D)increase $12,000

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Definitions:

Seated Position

A posture where an individual rests on their buttocks with the torso upright, commonly used for activities such as working, eating, and driving.

Head of Fibula

The proximal, or top end of the fibula bone, near the knee, which articulates with the tibia and lateral condyle of the femur.

Extensor Digitorum Longus

The Extensor Digitorum Longus is a long muscle located in the anterior compartment of the leg, active in extending the toes and dorsiflexing the foot.

Tibialis Anterior

A muscle located in the anterior compartment of the leg, important for dorsiflexion and inversion of the foot.