Martin Incorporated Provided the Following Information Regarding Its Only Product

question 178

Multiple Choice

Martin Incorporated provided the following information regarding its only product: Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3500 units at a sale price of $41 per product assuming additional fixed manufacturing overhead costs of $5100 is incurred? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.)

• A)Increase by $143,500
• B)Decrease by $75,225
• C)Increase by $75,225
• D)Increase by $80,325

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Definitions:

Average Total Assets

A financial metric that represents the average value of all a company's assets over a specified period.

Return On Assets

This ratio indicates how efficiently a company uses its assets to generate profit, calculated as net income divided by total assets.

Ratio Form

A presentation format for financial statements or equations where components are displayed as a proportion of a whole.

Assets Invested

The total value of physical and financial assets that have been allocated or deployed in various investments by an individual or organization.