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.

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Definitions:

Nonpublic Information

Information that is not openly disclosed or available to the general public, often carrying confidentiality.

Securities Exchange Act

A federal law governing the trading of securities, such as stocks and bonds, in the United States, primarily through regulation of the exchanges.

Section 10(b)

A provision of the Securities Exchange Act of 1934 that prohibits manipulative and deceptive practices in the buying and selling of securities.

Trading Securities

Refers to a category of securities that a company buys and sells with the intent of making a profit over the short term.