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

question 87

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 2,500 sails at a price of $205 per unit, fixed costs increase by $14,000, and variable marketing and administrative costs for that order are $25 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

• A) Increase by $23,500
• B) Decrease by $23,500
• C) Increase by $37,500
• D) Increase by $86,000

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Definitions:

Prospect's Concern

Any issue or question that a potential customer has regarding a product or service, which may affect their purchasing decision.

Free Discussion

An open conversation in which participants are encouraged to share thoughts and ideas on a topic without strict structures or limitations.

Nondirective Question

A nondirective question is an open-ended query that encourages a detailed response, allowing the person to express thoughts and feelings without leading them in a specific direction.

Closed Ended

Pertains to questions or statements that limit responses to a simple "yes" or "no," often used in surveys, interviews, and sales techniques to control the direction of a conversation.