The Immanuel Company Has Just Obtained a Request for a Special

question 56

Multiple Choice

The Immanuel Company has just obtained a request for a special order of 6,000 jigs to be shipped at the end of the month at a selling price of $7 each. The company has a production capacity of 90,000 jigs per month with total fixed production costs of $144,000. At present, the company is selling 80,000 jigs per month through regular channels at a selling price of $11 each. For these regular sales, the cost for one jig is: If the special order is accepted, Immanuel will not incur any selling expense; however, it will incur shipping costs of $0.30 per unit. Total fixed production cost would not be affected by this order.
-If Immanuel accepts this special order,the change in monthly net operating income will be a:

• A)$12,600 increase
• B)$14,400 increase
• C)$3,600 increase
• D)$1,800 increase

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Definitions:

Zygote

A cell produced by the union of an ovum and a sperm.

Fetus

A developing human from roughly eight weeks after conception to the moment of birth.

Ovum

An egg, the female gamete or reproductive cell.

Cervical Erosion

A condition characterized by the appearance of red, inflamed areas on the cervix, often seen as an abrasion or erosion but usually without true tissue loss.