Anderson Co If Anderson Accepts the Order, $8 of Fixed Overhead Per

question 81

Multiple Choice

Anderson Co. makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson's production costs are as follows:
$\begin{array}{|l|l|}\hline \text { Direct materials } & \$ 8 \\\hline \text { Direct labor } & 32 \\\hline \text { Variable overhead } & 12 \\\hline \text { Fixed overhead(based on normal capacity) } & 34 \\\hline\end{array}$
If Anderson accepts the order, $8 of fixed overhead per unit will be eliminated.
If the offer is accepted, operating income will

• A) increase by $100,000.
• B) decrease by $70,000.
• C) decrease by $30,000.
• D) increase by $60,000.

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Definitions:

Brain Stimulation

Therapeutic procedures that use electrical or magnetic fields to stimulate brain activity, used in treating a variety of neurological and psychiatric conditions.

Nervous System

The part of an organism that coordinates its actions by transmitting signals to and from different parts of its body, comprising the brain, spinal cord, and nerve fibers.

Cultural Competence

The ability of individuals and organizations to effectively interact with people from diverse cultures, understanding their cultural norms and values.

Cultural Specific Themes

Elements or issues that are particularly relevant or sensitive to specific cultural or ethnic groups, influencing behavior and beliefs.