The Following Information Relates to Current Production of Outdoor Chaise

question 112

Multiple Choice

The following information relates to current production of outdoor chaise lounges at Backyard Posh: The regular selling price per chaise lounge is $300.00. The company is analyzing the opportunity to accept a special sales order for 1,200 chaise lounges at a price of $225.00 per unit. Fixed costs would remain unchanged. The company has the capacity to produce 15,000 chaise lounges per year, but is currently producing and selling 10,000 chaise lounges per year. Regular sales will not be affected by the special order. If the company were to accept this special order, how would operating income be affected?

• A)Increase by $270,000
• B)Increase by $111,600
• C)Decrease by $111,600
• D)Decrease by $270,000

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Definitions:

ControlNet Protocol

A network protocol used in industrial automation environments designed to allow real-time, high-speed data exchange between control devices like PLCs and SCADA systems.

High-Speed Link

A communication connection that allows for rapid data transfer between devices or systems.

SERCOS Standard

An open standard for data exchange between drives and controls in industrial applications, facilitating real-time communication.

Field Devices

Equipment such as sensors, valves, actuators, and transmitters located in the physical area being monitored or controlled.