Inscribe,Inc

question 48

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 3600 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 $10,800
• B) decrease of $10,800
• C) increase of $11,340
• D) decrease of $11,340

---

Definitions:

Business Organization

A structured entity set up to conduct commercial, industrial, or professional activities, governed by a particular legal structure.

Joint Venture

An enterprise undertaken by two or more parties who share profits, losses, and control over the project.

Licensed Fishing Outfits

Enterprises authorized to offer fishing activities and services, typically inclusive of guides, gear, and sometimes accommodations.

Business Organization

The structure of a company or enterprise, specifying how it is formed, run, and governed, including entities like corporations, partnerships, and sole proprietorships.