Classic Loungers Is in the Process of Preparing a Production

question 131

Multiple Choice

Classic Loungers is in the process of preparing a production cost budget for August.Actual costs in July for 200 chaise lounge chairs were: $$\begin{array} { l r } \text { Materials cost } & 6,000 \\\text { Labor cost } & 8,000 \\\text { Rent } & 2,000 \\\text { Depreciation } & 4,000 \\\text { Other fixed costs } & 5,000 \\\text { Total } & \$ 25,000 \\\hline\end{array}$$ Each chair was sold for $140 in July.Management estimates that sales will increase to 230 chairs during August if the company lowers the selling price to $130 per chair.Materials and labor are the only variable costs.Under what situation should the company lower the price of its chaise lounge chairs?

• A)If total revenue exceeds totals costs under the new pricing
• B)If incremental revenue exceeds the old revenue
• C)If incremental profit is a positive number
• D)If incremental costs decrease

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Definitions:

Revolutionary Potential

The capacity or possibility within a society or group to undertake significant, radical change, especially in its social and political structures.

Identity Politics

Political stances or movements that emphasize the interests, concerns, and perspectives of specific social groups often defined by race, gender, sexual orientation, or religion.

Social Movements

Collective, organized efforts by groups of people to promote or resist change in society based on shared interests or values.

Marginalized Identity

Social positioning of an individual or group as peripheral or lesser within a society due to factors like race, gender, sexuality, and socioeconomic status.