Hanover Binding Plans to Produce 40,000 Books Next Year at a Total

question 70

Multiple Choice

Hanover Binding plans to produce 40,000 books next year at a total cost of $1,640,000 with a selling price per book of $66.00.The fixed costs total $280,000.Management is considering lowering the price to $60.00 per book, and feels that this action will cause sales to climb to 50,000 books.What is the amount of incremental profit if 50,000 books are sold?

• A)$340,000 profit
• B)$20,000 profit
• C)$1,700,000 profit
• D)$1,300,000 profit

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Definitions:

Maturation Of Coal

The process through which plant material is converted into coal over millions of years, increasing in carbon content and energy.

Methane

A greenhouse gas consisting of one carbon atom and four hydrogen atoms, commonly produced through anaerobic decomposition of organic material.

Impurities

Foreign substances within a material that can affect its properties, performance, or appearance.

Tar Sand

A sand or other sediment containing tar.