Shickman Company Makes the Widgets It Uses in One of Its

question 64

Multiple Choice

Shickman Company makes the widgets it uses in one of its products at a cost of $8 per unit.This cost includes $2 of fixed overhead.The company needs 10,000 of these plugs annually, and Orlando Company has offered to sell them at $5 per unit.If Shickman Company purchases the plugs, the company would:

• A)Increase profits by $30,000.
• B)Decrease profits by $10,000.
• C)Increase profits by $10,000.
• D)Decrease profits by $30,000.

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Definitions:

Change Fund

A change fund is a set amount of money, composed of various denominations, used to make change for transactions in business operations.

Cash Register

A mechanical or electronic device for calculating and recording sales transactions, and an attached drawer for storing cash.

Cash Sales

Transactions where the payment for goods or services is made immediately in cash, without extending credit.

Cash Register Total

The sum amount of cash transactions recorded by a cash register within a certain time period.