Lattimer Company Had the Following Results of Operations for the Past

question 92

Multiple Choice

Lattimer Company had the following results of operations for the past year: $$\begin{array} { | l | r | r | } \hline \text { Sales } ( 15,000 \text { units at } \$ 12 ) & & \$ 180,000 \\\hline \text { Variable manufacturing costs } & \$ 97,500 & \\\hline \text { Fixed manufacturing costs } & 21,000 & \\\hline \text { Selling and administrative expenses (all fixed) } & \underline { 36,000 } & \underline { ( 154,500 ) }\\\hline \text { Operating income } & & \underline { \$ 25,500} \\\hline\end{array}$$ A foreign company whose sales will not affect Lattimer's market offers to buy 5,000 units at $7.50 per unit. In addition to existing costs, selling these units would add a $0.25 selling cost for export fees. Lattimer's annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a:

• A) $2,000 loss.
• B) $8,250 loss.
• C) $3,750 profit.
• D) $3,250 loss.
• E) $5,000 profit.

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Definitions:

Electron Transport Chain

A series of complexes that transfer electrons from electron donors to electron acceptors via redox (reduction and oxidation) reactions, and the transfer of electrons is coupled with the transfer of protons (H+ ions) across a membrane, which generates ATP.

Proton Pumping

The active transport of hydrogen ions (protons) across a membrane, often creating a gradient used for energy production in cells.

Intermembrane Space

The region between the inner and outer membranes of mitochondria or chloroplasts, involved in energy production.

Fermentation

A metabolic process that converts sugar to acids, gases, or alcohol in the absence of oxygen, utilized in food production and biofuel generation.