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

question 171

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 2,500 bench seats at a price of $155 per unit. Fixed costs would increase by $10,000. 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) Decrease by $57,500
• B) Increase by $57,500
• C) Decrease by $47,500
• D) Increase by $47,500

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Definitions:

Avoid Risks

A strategy or approach aimed at minimizing potential losses or negative outcomes by not engaging in actions that are perceived to carry risk.

Working in Teams

The collaborative effort of a group of people to achieve a common goal or complete a task in the most effective and efficient way.

Learned Needs

Needs that are acquired or developed over time as a result of life experiences, cultural exposure, or the influence of social interactions.

Achievement

The accomplishment of an aim or purpose, often associated with a sense of pride and fulfillment.