The Following Information Relates to a Product Produced by Ashland

question 66

Multiple Choice

The following information relates to a product produced by Ashland Company: Fixed selling costs are $1,000,000 per year.Variable selling costs of $4 per unit sold are added to cover the transportation cost.Although production capacity is 500,000 units per year,Ashland expects to produce only 400,000 units next year.The product normally sells for $40 each.A customer has offered to buy 60,000 units for $30 each.The customer will pay the transportation charge on the units purchased.If Ashland accepts the special order,the effect on income would be a:

• A)$60,000 increase.
• B)$180,000 increase.
• C)$420,000 increase.
• D)$600,000 decrease.

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Definitions:

Paralysis

The loss of the ability to move and sometimes to feel anything in part or most of the body, typically as a result of illness, injury, or poison.

Facial Nerve

The seventh cranial nerve that controls the muscles of facial expression.

Right Side

Referring to the right half or portion of an object, body, or directional orientation.

Motor Control

The process by which humans and animals use their brain and nervous system to activate and coordinate the muscles and limbs involved in the performance of a motor skill.