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

question 68

Multiple Choice

Use the information below to answer the following question(s) :
Pluto Incorporated provided the following information regarding its single product:

The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level) . There was no beginning inventory.
-What would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $55 per product? The company has excess capacity and regular sales will not be affected by this special order.

• A) Increase by $115,500
• B) Increase by $269,500
• C) Decrease by $115,500
• D) Decrease by $269,500

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Definitions:

Bedridden

The condition of a person who is unable to get up from bed due to illness, disability, or weakness.

Mineral Oil

A colorless, odorless petroleum derivative used as a laxative or to soothe skin.

Diuretic Effect

Refers to the increased passage of urine caused by substances (diuretics) that help in the removal of fluid from the body.

Cranberry Juice

A liquid extracted from cranberries, often used for its health benefits, including urinary tract health.