It Costs Garner Company $12 of Variable and $5 of Fixed

question 67

Multiple Choice

It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income?

• A) $6,000 increase
• B) $6,000 decrease
• C) $9,000 decrease
• D) $45,000 increase

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Definitions:

Confederates

Individuals who secretly work together, especially within the context of experimental research to simulate social interactions or situations.

Dissenting Opinion

An opinion in a legal case that differs from the majority's decision, offering alternative views or legal reasoning.

Conformity

The process by which individuals adjust their behaviors, attitudes, or beliefs to match the norms or standards of a group.

Task Difficulty

The complexity or challenge level of a task, which can influence the effort and approach required to successfully complete it.