The Following Information Relates to a Product Produced by Creamer

question 13

Multiple Choice

The following information relates to a product produced by Creamer Company: Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold.Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year.The product normally sells for $120 each.A customer has offered to buy 60,000 units for $90 each.
If the firm produces the special order, the effect on income would be a

• A) $360,000 increase.
• B) $360,000 decrease.
• C) $540,000 increase.
• D) $540,000 decrease.

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Definitions:

Net Migration Rate

The difference between the number of immigrants and the number of emigrants throughout the year, per 1,000 inhabitants in a given country.

Emigrants

Individuals who leave their own country to settle permanently in another.

Immigrants

Individuals who move from one country to another with the intention of settling permanently or temporarily in the new country.

Neo-Malthusian

Relating to the belief in population control through the use of contraception and family planning, updating Thomas Malthus's predictions about population growth and sustainability.