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:

Denser Look

A reference to text or material that appears tightly packed or heavily loaded with information, often making it challenging to read or scan.

Typeface Variety

The use of different font styles and weights within a document to enhance readability and visual appeal.

Justified Margins

In text formatting, the alignment of text evenly along both the left and right margins, creating a clean look.

Graphic Designs

The art and practice of planning and projecting ideas and experiences with visual and textual content.