Walton Company Manufactures a Product with the Following Costs Per

question 2

Multiple Choice

Walton Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: The company has the capacity to produce 90,000 units. The product regularly sells for £120. A wholesaler has offered to pay £110 a unit for 7,500 units.
If the special order is accepted, the effect on operating income would be a

• A) £75,000 decrease.
• B) £429,000 increase.
• C) £495,000 increase.
• D) £249,000 increase.

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Definitions:

Internal Controls

Procedures and measures taken by a business to safeguard its assets, ensure accuracy and reliability in accounting records, and enhance operational efficiency.

Payroll

The total amount paid to employees for services they provided during a certain period.

Double Time

A pay rate that is twice the employee's regular hourly rate, often applied for working on holidays or overtime.

Cumulative Earnings

The total amount of net income earned by an individual or entity over a period, often used in the context of calculating pensions or other benefits.