Wisconsin Company Has a Current Production Capacity Level of 200,000

question 28

Multiple Choice

Wisconsin Company has a current production capacity level of 200,000 units per month.At this level of production,variable costs are $0.90 per unit and fixed costs are $0.50 per unit.Current monthly sales are 164,500 units.Gates Company has contracted Wisconsin Company about purchasing 20,000 units at $2.00 each.Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.If the order is accepted,what is Wisconsin Company's increase in costs?

• A)$18,000
• B)$20,000
• C)$24,000
• D)$40,000

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Definitions:

Skills Mismatch

A discrepancy between the skills offered by labor market participants and the skills demanded by employers.

Available Job Openings

The number of job positions that are currently unfilled and available to be applied for by job seekers.

Deflation

A decrease in the general price level of goods and services, often associated with an increase in the value of money.

Disinflation

A decrease in inflation rate, demonstrating a deceleration in how quickly the costs of goods and services increase.