The Following Information Relates to Current Production of Outdoor Chaise

question 196

Multiple Choice

The following information relates to current production of outdoor chaise lounges at Backyard Posh: The regular selling price per chaise lounge is $350. The company is analyzing the opportunity to accept a special sales order for 300 chaise lounges at a price of $210 per unit. Variable marketing and administrative costs would be $15 per unit lower than on regular sales. Fixed costs would increase by $15,000. The company has the capacity to produce 115,000 chaise lounges per year, but is currently producing and selling 13,000 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 $26,400
• B)Decrease by $11,400
• C)Increase by $26,400
• D)Increase by $11,400

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Definitions:

Homologous Chromosomes

Pairs of chromosomes in a diploid organism that are similar in shape, size, and gene content, one inherited from each parent.

Autosomes

Chromosomes that are not sex chromosomes; they come in pairs of matching chromosomes and contain the bulk of an organism’s genetic material.

Chromosome Deletion

A genetic mutation where a part of a chromosome or a sequence of DNA is lost during DNA replication, which can lead to diseases or abnormalities.

Williams Syndrome

A genetic disorder characterized by developmental delays, cardiovascular disease, and distinctive facial features, often accompanied by a highly social personality and a strong affinity for music.