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

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Definitions:

Durkheim

Émile Durkheim, a French sociologist, formally established the academic discipline of sociology and is best known for his theory of social integration and his studies of social cohesion and collective conscience.

Color Line

A term that describes the division of race and the systemic inequalities and segregation between white and non-white people, originally focusing on the division between blacks and whites.

W. E. B. DuBois

An influential African-American sociologist, historian, and civil rights activist known for his contributions to the understanding of the African-American experience and the fight for equality.

Empirical Analysis

The use of observed and measured phenomena to investigate relationships and test theories.