Benjamin Company Had the Following Results of Operations for the Past

question 59

Multiple Choice

Benjamin Company had the following results of operations for the past year:
$$\begin{array} { l r l r } \text { Sales } ( 16,000 \text { units at } \$ 10 ) & & \$ 160,000 \\\text { Direct materials and direct labor } & \$ 96,000 & \\\text { Overhead (20\% variable) } & 16,000 & \\\text { Selling and administrative expenses (all fixed) } & 32,000 & ( 144,000 ) \\\hline \text { Operating income } & & \$ 16,000 \\\hline \end{array}$$ A foreign company offers to buy 4,000 units at $7.50 per unit.In addition to variable manufacturing costs,selling these units would increase fixed overhead by $600 and selling and administrative costs by $300.Assuming Benjamin's productive capacity is 16,000 units per year and it accepts the offer,its profits will:

• A)Decrease by $10,000.
• B)Decrease by $10,900.
• C)Decrease by $6,000.
• D)Increase by $9,100.
• E)Increase by $4,300.

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Definitions:

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Innovative, pioneering work, particularly in the arts, that challenges established norms and practices, often aiming to push the boundaries of cultural expression.

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Ideologists who follow the teachings of Karl Marx, advocating for a society without classes where the means of production are owned collectively.

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