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:

Postoperative

Referring to the period of time and care following a surgical procedure, focusing on recovery and monitoring for complications.

Analgesic

A type of medication used to relieve pain without causing loss of consciousness.

Nonskid Soles

Footwear designed with a textured pattern on the bottom to prevent slipping on surfaces.

Upper Body Strength

The physical strength of the muscles in the upper part of the body, including the arms, shoulders, chest, and back.