Use the Information Below to Answer the Following Question(s)

question 7

Multiple Choice

Use the information below to answer the following question(s) :
Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production:

-If Clear Sky Sailmakers accepts a special order for 2,000 sails at a price of $220 per unit, and fixed costs increase by $7,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

• A) Decrease by $3,000
• B) Increase by $103,000
• C) Increase by $3,000
• D) Increase by $10,000

---

Definitions:

Courage

The ability to confront fear, pain, danger, uncertainty, or intimidation.

Entrepreneurship

The act of creating, developing, and managing a new business venture to profit by taking on financial, psychological, and social risks.

Myths

Traditional stories, typically involving supernatural beings or events, that serve to explain a natural or social phenomenon, or cultural beliefs.

Realities

The state of things as they actually exist, as opposed to how they may appear or might be imagined.