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:

Reaction Time

Reaction time is the amount of time it takes for a person to respond to a stimulus, indicating the speed of cognitive processing and physical response.

Respond to Stimulus

The process by which organisms perceive and react to changes in their environment or to specific external factors.

Dyslexia

An educational disorder where individuals struggle with reading because of their inability to recognize and connect speech sounds to letters and words.

Reading Disorder

A learning disability characterised by difficulties with accurate or fluent word recognition, poor decoding, and spelling abilities.