The Following Information Relates to a Product Produced by Ashland

question 43

Multiple Choice

The following information relates to a product produced by Ashland Company: Fixed selling costs are $1,000,000 per year.Although production capacity is 500,000 units per year,Ashland expects to produce only 400,000 units next year.The product normally sells for $80 each.A customer has offered to buy 60,000 units for $60 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)$120,000 increase.
• B)$360,000 increase.
• C)$840,000 increase.
• D)$1,200,000 decrease.

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Definitions:

Organization

An entity comprising multiple people, such as a company, institution, or association, working together to achieve a common purpose.

Member

An individual who belongs to a group, organization, or some form of collective, often contributing towards the collective goals.

Objectives

Specific, measurable goals set by individuals or organizations to achieve desired outcomes.

High Performance

Achieving significantly better outcomes or levels of productivity compared to average standards or expectations.