Aerotoy Company Makes Toy Airplanes

question 88

Multiple Choice

Aerotoy Company makes toy airplanes. One plane is an excellent replica of a 737; it sells for $5. Vacation Airlines wants to purchase 12,000 planes at $1.75 each to give to children flying unaccompanied. Costs per plane are as follows: No variable marketing costs would be incurred. The company is operating significantly below the maximum productive capacity. No fixed costs are avoidable. However, Vacation Airlines wants its own logo and colors on the planes. The cost of the decals is $0.01 per plane and a special machine costing $1,500 would be required to affix the decals. After the order is complete, the machine would be scrapped. Should the special order be accepted?

• A) Yes, income will increase by $300.
• B) No, income will decrease by $180.
• C) No, income will decrease by $1,500.
• D) Yes, income will increase by $180.
• E) It doesn't matter; there will be no change in income.

Learn the legal protections and limitations provided to members/owners in different types of business entities.

Analyze the strategic benefits of vertical mergers in business operations and supply chain management.

Understand the concepts and stages outlined in Perry's theory of cognitive development, including dualistic and relativistic thinking.

Recognize the characteristics and indicators of different stages of cognitive development and adjustment in adulthood as identified by Schaie.

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Definitions:

Single Factor Explanations

The attribution of a phenomenon or condition to a single cause, often oversimplifying complex issues.

Scientific Inquiry

The systematic investigation of scientific questions through experimentation, observation, and deduction to build a body of knowledge about the natural world.

Ultimate Goal

The final or most important aim or objective one is attempting to achieve.

Socioeconomic Spectrum

A range that categorizes individuals or groups based on their economic and social position in relation to others, often measured by factors like income, education, and occupation.