Termus Industries Is Operating at 85% of Its Manufacturing Capacity

question 2

Multiple Choice

Termus Industries is operating at 85% of its manufacturing capacity of 50,000 product units per year. A customer has offered to buy an additional 4,000 units at $25 each and sell them outside the country so as not to compete with Termus. The following data are available:

In producing 4,000 additional units, fixed overhead costs would remain at their current level but incremental variable overhead costs of $4 per unit would be incurred. What is the effect on income if Termus accepts this order?

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Definitions:

Estrogen Levels

The concentration of estrogen, a primary female sex hormone, which plays a crucial role in the regulation of reproductive and sexual functions.

Prolactin Levels

The concentration of prolactin hormone in the blood, which is important for lactation and may affect reproductive health.

Exhibitionism

A psychiatric disorder characterized by an excessive need to expose one’s genitals to an unsuspecting person, or exhibiting behaviors that are meant to attract attention to oneself.

Paraphilia

A set of sexual interests that differ significantly from the norm, often involving extreme or atypical targets of arousal.