The Following Information Relates to a Product Produced by Creamer

question 126

Multiple Choice

The following information relates to a product produced by Creamer Company: Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 60,000 units for $90 each.
If the firm produces the special order, the effect on income would be a

• A) $360,000 increase.
• B) $360,000 decrease.
• C) $540,000 increase.
• D) $540,000 decrease.

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Definitions:

Recommended Intensity

The advised level of effort or exertion in physical activity, often expressed as a percentage of maximum heart rate or capacity.

Health-Related Fitness

Components of physical fitness that contribute to the proper functioning of the body's systems and improve health, including cardiovascular fitness, muscle strength, endurance, flexibility, and body composition.

Physically Active

Engaging in bodily movements that expend energy, including exercises, sports, and daily physical tasks.

Body Composition

The proportion of fat, bone, water, and muscle in human bodies, often used in fitness and health assessments to determine the ratio of fat to lean mass.