Comics Plus Has a Current Production Level of 200,000 Comics

question 14

Multiple Choice

Comics Plus has a current production level of 200,000 comics per month. Unit costs at this level are: Current monthly sales are 180,000 units. Printers Ltd. has contacted Comics Plus about purchasing 15,000 units at $1.00 each. Current sales would not be affected by the special order, and variable marketing/ distributing costs would not be incurred on the special order.
What is Comics Plus' change in profits if the order is accepted?

• A) $6,000 increase
• B) $6,000 decrease
• C) $7,500 increase
• D) $9,000 increase
• E) $3,000 increase

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Definitions:

Net Loss

The result when a company's total expenses exceed its total revenues during a specific period, indicating a financial loss.

Worksheet

A paper or electronic document used to organize and simplify accounting information before the preparation of financial statements.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure that a company's bookkeeping system is mathematically correct.

Straight-Line Depreciation

A technique for distributing the expense of a physical asset across its lifespan in consistent yearly increments.