The Following Information Relates to Current Production of Outdoor Chaise

question 78

Multiple Choice

The following information relates to current production of outdoor chaise lounges 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 200 chaise lounges at a price of $200.00 per unit.Fixed costs would increase by $20,000.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)Decrease by $6,400
• B)Increase by $13,600
• C)Decrease by $13,600
• D)Increase by $6,400

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Definitions:

Prosocial Behavior

Helping behavior that benefits others.

Immanent Justice

The belief, particularly common in children, that moral behavior is immediately rewarded and immorality is instantly punished in a natural or magical manner.

Postconventional Morality

A stage in Kohlberg's theory of moral development where an individual's sense of morality is defined by internal principles, and social rules are seen as relative and not absolute.

Conventional Morality

A stage in Kohlberg's theory of moral development where individuals make moral decisions based on societal norms and laws.