Markson Company Had the Following Results of Operations for the Past

question 35

Multiple Choice

Markson Company had the following results of operations for the past year: $\begin{array}{lrr}\text { Sales }(8,000 \text { units at } \$ 20) & & \$ 160,000 \\\text { Variable manufacturing costs } & \$ 86,000 & \\\text { Fixed manufacturing costs } & 15,000 & \\\text { Variable administrative expenses } & 12,000 & \\\text { Fixed selling and administrative expenses } & 20,000 & (133,000) \\\hline\text {Operating income}&&\$ 27,000 \\\hline\end{array}$ A foreign company offers to buy 2,000 units at $14 per unit.In addition to variable manufacturing and administrative costs,selling these units would increase fixed overhead by $1,600 for the purchase of special tools.Markson's annual productive capacity is 12,000 units.If Markson accepts this additional business,its profits will:

• A)Increase by $3,500.
• B)Decrease by $5,650.
• C)Decrease by $1,600.
• D)Increase by $1,900.
• E)Decrease by $5,100.

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Definitions:

Collectivist Cultures

Societies that prioritize the goals, needs, and views of the group over those of the individual, emphasizing strong familial and community ties.

Conformity

Refers to the act of aligning one's attitudes, beliefs, or behaviors to group norms or standards.

Reciprocity

The practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.

Returns Favors

Describes the act of reciprocating or doing something for someone because they have done something for you, embodying the principle of reciprocity.