The Following Information Relates to the Jax Company for the Upcoming

question 39

Multiple Choice

The following information relates to the Jax Company for the upcoming year. The cost of goods sold includes $2,400,000 of fixed manufacturing overhead;the operating expenses include $200,000 of fixed marketing expenses.A special order offering to buy 50,000 units for $15.00 per unit has been made to Jax.Fortunately,there will be no additional operating expenses associated with the order;however,Jax is operating at full capacity.How much will operating profits increase if Jax accepts the special order?

• A)$50,000.
• B)$125,000.
• C)$200,000.
• D)$250,000.
• E)Operating profits will not increase as a result of accepting the special order.

Analyze the effect of changing inventory valuation methods on tax expenses, net income, and company cash flows.

Determine the value of ending inventory and cost of goods sold using different inventory costing methods.

Correctly calculate cost of goods available for sale and cost of goods sold.

Understand the principle of the lower-of-cost-or-market rule and its application.

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Definitions:

Dividends

Dividends are a portion of a company's earnings distributed to shareholders, representing a share of the profits.

Trailing Spouses

Partners who follow their spouse to a new location due to the spouse's job relocation, often facing challenges in their own careers.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature, especially in the workplace or educational settings.

Retaliated

To respond to an action or injury with an equivalent or greater action, often in the context of revenge or defense.