Inscribe,Inc

question 175

Multiple Choice

Inscribe,Inc.manufactures and sells pens for $7 each.Cubby Corp.has offered Inscribe,Inc.$4 per pen for a one-time order of 3500 pens.The total manufacturing cost per pen,using absorption costing,is $1 per unit and consists of variable costs of $0.85 per pen and fixed overhead costs of $0.15 per pen.Assume that Inscribe,Inc.has excess capacity and that the special pricing order would not adversely affect regular sales.What is the change in operating income that would result from accepting the special pricing order?

• A)increase of $10,500
• B)decrease of $10,500
• C)increase of $11,025
• D)decrease of $11,025

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Definitions:

Wagner Act

also known as the National Labor Relations Act of 1935, is a foundational statute in United States labor law which protects the rights of employees to organize unions and engage in collective bargaining.

Unfair Labor Practices

Actions by employers or unions that violate the rights of employees or the collective bargaining agreement.

National Union Office

The central headquarters of a labor union, managing affairs and strategies at a national level.

Landrum-Griffin Act

U.S. federal law enacted in 1959 to regulate labor unions' internal affairs and their officials' responsibilities to members.