Marx Company Has a Current Production Capacity Level of 200,000

question 89

Multiple Choice

Marx Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.50 per unit and fixed costs are $0.50 per unit. Current monthly sales are 183,000 units. Heaven Company has contacted Marx Company about purchasing 15,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. Marx Company's change in profits if the order is accepted will be:

• A) a $15,000 increase
• B) a $7,500 decrease
• C) a $7,500 increase
• D) a $15,000 decrease

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Definitions:

Hippocampus

An area in the brain linked with the creation, structuring, and preservation of memories.

Explicit Memories

Recollections involving facts and events that one is able to bring back into conscious thought.

Body Movement

Physical motions carried out by the skeletal and muscular system, enabling posture and locomotion.

Neural Signals

Electrical impulses transmitted through neurons, facilitating communication within the nervous system.