The Young Company Has Gathered the Following Information for a Unit

question 105

Multiple Choice

The Young Company has gathered the following information for a unit of its most popular product:
$$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 12 \\\hline \text { Direct labor } & 6 \\\hline \text { Overhead (40\% variable) } & 10 \\\hline \text { Cost to manufacture } & 28 \\\hline \text { Desired markup (60\%) } & 14 \\\hline \text { Target selling price } & \$ 42 \\\hline\end{array}$$
The above cost information is based on 10,000 units.A distributor has offered to buy 2,000 units at a price of $32 per unit.This special order would not disturb regular sales.Special packaging and other selling expenses would be an additional $0.50 per unit for the special order.If the special order is accepted,Young's operating profits will increase by:

• A) $4,000.
• B) $6,400.
• C) $8,000.
• D) $19,000.

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Definitions:

Contraction

A shortening or increase in tension of muscle fibers, often resulting in movement or maintenance of posture.

Ventricles

The two lower chambers of the heart that are responsible for pumping blood out of the heart to the lungs and the rest of the body.

S-T Segment

The portion of an ECG tracing between the S and T waves, often analyzed for indications of heart conditions.

Forced Vital Capacity

The total volume of air that can be forcibly exhaled from the lungs after taking the deepest breath possible.