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:

Performance Improvement Plan

A formal document created to outline an employee's performance deficiencies and set goals for improvement.

HR Department

The division within an organization that is focused on activities relating to employees, including hiring, training, compensation, and compliance with labor laws.

Performance Measures

Indicators or metrics used to assess the effectiveness, efficiency, and quality of work performed by individuals or organizations.

Benchmarks

Standard points of reference against which things can be compared or assessed to measure the quality or performance.