Use the Information Below to Answer the Following Question(s)

question 199

Multiple Choice

Use the information below to answer the following question(s) :
Venus Corporation provided the following information regarding its single product:

The regular selling price for the product is $75. The annual quantity of units produced and sold is 20,000 units (the costs above relate to the 20,000 units production level) . There was no beginning inventory.
-What would be the effect on Venus Corporation's operating income of accepting a special order for 2,000 units at a sale price of $45 per product assuming additional fixed manufacturing overhead costs of $7,000 are incurred? The company has excess capacity and regular sales will not be affected by this special order.

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Definitions:

80/20 Principle

A principle, also known as the Pareto Principle, that suggests 80% of effects come from 20% of causes, emphasizing the unequal relationship between inputs and outputs.

Statistical Process Control Charts

Tools used in quality control to plot data over time, enabling the detection of outliers, trends, or variations in processes, and assisting in maintaining process controls.

New Customer

An individual or entity that has not previously purchased or engaged with a company's products or services.

Keeping A Current Customer

The strategies and practices aimed at maintaining and enhancing a continuing relationship with an existing customer to ensure their repeat business.