Screen Saver Industries Has Spare Production Capacity Due to the Cancellation

question 41

Multiple Choice

Screen Saver Industries has spare production capacity due to the cancellation of a customer order. An overseas retail chain has offered the business an order for 300 units at a price of $25 each. The variable cost of the units is $20 each and the fixed costs are $3 per unit. What will be the impact on Screen Savers profit if the special order is accepted?

• A)$1,500 increase.
• B)$1,500 decrease.
• C)$600 increase.
• D)$600 decrease.

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Definitions:

Exponential Distribution

A probability distribution that describes the time between events in a process where events occur continuously and independently at a constant average rate.

Normal Distribution

A bell-shaped probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

T Distribution

A probability distribution that is used in statistics to estimate population parameters when the sample size is small and the population variance is unknown.

Two-sided Test

A statistical test where the region of rejection is on both sides of the sampling distribution, used to determine if there's a significant difference from a specific value.