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

question 269

Multiple Choice

Use the information below to answer the following question(s) :
The following information relates to current production of bench seats for boats at Aquamarine Manufacturing:

The regular selling price per bench seat is $200. The company has the capacity to produce 15,000 bench seats per year, but is currently producing and selling 10,000 bench seats per year.
-Aquamarine Manufacturing is analyzing the opportunity to accept a special sales order for 3,000 bench seats at a price of $175 per unit. Fixed costs would remain unchanged. Regular sales will not be affected by the special order. If the company were to accept this special order, how would operating income be affected?

• A) Increase by $129,000
• B) Increase by $525,000
• C) Decrease by $129,000
• D) Decrease by $525,000

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Definitions:

TPS

Throttle Position Sensor; a sensor used to monitor the position of the throttle in an internal combustion engine.

FMI Code 2

A diagnostic trouble code indicating an issue with data erratic, intermittent, or incorrect data as measured by the vehicle's electronic systems.

Freightliner

A leading manufacturer and brand of commercial trucks and heavy-duty vehicles, known for innovation and quality in the transportation industry.

Navistar

A corporation that manufactures trucks, buses, defense vehicles, and engines.