Benjamin Company Had the Following Results of Operations for the Past

question 33

Multiple Choice

Benjamin Company had the following results of operations for the past year: $\begin{array}{llr} \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) \\ \text {Operating income } &&\$16,000\\\end{array}$
A foreign company (whose sales will not affect Benjamin's market) 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 accepts the offer, its profits will:

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

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Definitions:

Behavior Feedback Effect

describes how the expression of a behavior can influence and reinforce the feelings and attitudes associated with that behavior.

Facial Feedback Effect

The hypothesis that facial movements can influence emotional experiences, suggesting that smiling can make you feel happier.

Self-Reported Emotions

Emotions that individuals acknowledge and describe about themselves, typically through verbal or written reports.

Facial Expressions

Visible changes in the face that communicate someone's emotions to others.