The Following Information Relates to Current Production of Bench Seats

question 11

Multiple Choice

The following information relates to current production of bench seats for boats at Aquamarine Manufacturing: $$\begin{array} { | l | c c | } \hline \text { Variable manufacturing costs per unit } & \$ & 102.00 \\\hline \text { Tatal fixed manufacturing costs } & \$ & 525,000 \\\hline \text { Variable marketing and administrative costs per unit } & \$ & 30.00 \\\hline \text { Total fixed marketing and adrinistrative costs } & \$ &250,000 \\\hline\end{array}$$
-The regular selling price per bench seat is $200.00.The company is analyzing the opportunity to accept a special sales order for 2,000 bench seats at a price of $150.00 per unit.Fixed costs would remain unchanged.The variable marketing and administrative costs of $30.00 per unit would NOT be incurred on this special order.The company has the capacity to produce 15,000 bench seats per year,but is currently producing and selling 10,000 bench seats 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 $96,000
• B)Decrease by $36,000
• C)Increase by $96,000
• D)Increase by $36,000

---

Definitions:

Classification Table

A systematic arrangement of elements or objects based on a set of criteria, often used in science to organize data or concepts for analysis and understanding.

Volcanic Breccia

A volcanic rock containing angular fragments in a matrix of finer material.

Igneous Rocks

Rocks formed through the cooling and solidification of magma or lava, characterized by a crystalline texture and often classified by their silica content.

Classification Table

A systematic arrangement of data in rows and columns, typically used to organize and categorize information such as types or characteristics.