Centric Sail Makers Manufactures Sails for Sailboats

question 140

Multiple Choice

Centric Sail Makers manufactures sails for sailboats.The company has the capacity to produce 30,000 sails per year,and is currently producing and selling 25,000 sails per year.The following information relates to current production:
-The fixed manufacturing costs increase by $100,000 for every 500 units produced beyond the maximum capacity of the plant.If a special sales order is accepted for 5,500 sails at a price of $150 per unit,and if the order requires no variable and fixed marketing and administrative costs,what will be the effect on operating income?

• A)Operating income increases by $395,000
• B)Operating income decreases by $395,000
• C)Operating income increases by $385,000
• D)Operating income decreases by $385,000

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Definitions:

Nutritional Status

A measure of the body's health and vitality, determined by the intake, absorption, and use of nutrients.

Caloric Intake

The amount of calories consumed from foods and beverages by an individual within a certain time period.

Vitamins

Organic compounds that are essential in small amounts for the body to maintain health and support its biochemical functions.

Obese

A medical condition characterized by excess body fat that presents significant risks to health and wellbeing.