The Following Information Relates to Current Production of Outdoor Chaise

question 163

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 800 chaise lounge at a price of $250.00 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.The 800 units would not require any variable marketing and administrative expenses.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)Decrease by $94,400
• B)Decrease by $118,400
• C)Increase by $94,400
• D)Increase by $118,400

Understand the basic characteristics of perfect competition.

Identify how prices are set in a perfectly competitive industry.

Calculate profit per unit and understand how it is maximized.

Distinguish between industry and firm demand curves in perfect competition.

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Definitions:

Minor Accidents

Incidents that result in minimal harm or damage, often requiring little to no professional medical treatment.

Local Businesses

Small-scale enterprises operating within a specific geographic area, serving the community and contributing to the local economy.

Emotional Appeal

A persuasive technique that targets the emotions of the audience to elicit a response.

Eco-friendly

Referring to products, methods, practices, and policies that cause minimal harm to the environment.