Ratzlaff Company Has a Current Production Level of 20,000 Units

question 85

Multiple Choice

Ratzlaff Company has a current production level of 20,000 units per month.Unit costs at this level are:

Current monthly sales are 18,000 units.Jim Company has contacted Ratzlaff Company about purchasing 1,500 units at $2.00 each.Current sales would NOT be affected by the one-time-only special order,and variable marketing/distribution costs would NOT be incurred on the special order.What is Ratzlaff Company's change in operating profits if the special order is accepted?

• A)$400 increase in operating profits
• B)$400 decrease in operating profits
• C)$1,800 increase in operating profits
• D)$1,800 decrease in operating profits
• E)$1,500 increase in operating profits

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Definitions:

Depth Perception

The ability to perceive the world in three dimensions and to judge the distance of objects accurately.

Skin Sensations

Feelings perceived through the skin, including touch, pressure, heat, cold, and pain, mediated by the nervous system.

Pressure

The feeling of stressful urgency caused by the perception of the need to perform well in a situation or accomplish a task.

Color Constancy

The perceptual property by which the color of an object appears the same under varying lighting conditions.