Baden Company Manufactures a Product with a Unit Variable Cost

question 29

Multiple Choice

Baden Company manufactures a product with a unit variable cost of $100 and a unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $140 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:

• A) Income would decrease by $8,000.
• B) Income would increase by $8,000.
• C) Income would increase by $140,000.
• D) Income would increase by $40,000.

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Definitions:

Parenting

The process of promoting and supporting the physical, emotional, social, and intellectual development of a child from infancy to adulthood.

Adjustment

The process of adapting or becoming accustomed to a new situation, condition, or environment.

Healthy Adjustment

The process of adapting well in the face of adversity, trauma, tragedy, threats, or significant sources of stress.

Typical American Family

A societal construct that often encompasses a representation of a nuclear family unit consisting of two parents and their children living together, though variations and diversity in family structures are increasingly recognized.