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Widget Inc

question 177

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Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production: Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production:   If a special sales order is accepted for 5800 widgets at a price of $40 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)  A) Increase by $232,000 B) Increase by $17,400 C) Increase by $75,400 D) Decrease by $75,400 If a special sales order is accepted for 5800 widgets at a price of $40 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)


Definitions:

Individual Resistance

The act of opposing or standing against changes, policies, or practices that an individual believes are harmful or disagreeable.

Resource Allocation

The process of distributing available resources among various projects, departments, or units within an organization to maximize efficiency and effectiveness.

Perceptions

The way in which something is regarded, understood, or interpreted by an individual or group.

Habit

A regular practice or routine that is hard to give up, often performed unconsciously.

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