Globe Manufacturing Company Has Just Obtained a Request for a Special

question 116

Essay

Globe Manufacturing Company has just obtained a request for a special order of 12, 000 units to be shipped at the end of the current year at a discount price of $7.00 each.The company has a production capacity of 90, 000 units per year.At present, Globe is only selling 80, 000 units per year through regular channels at a selling price of $11.00 each.Globe's per unit costs at an 80, 000 unit level of production and sales are as follows: Variable selling and administrative expense will drop to $0.30 per unit on the special order units.The special order has to be taken in its entirety.This means that by accepting the special order, Globe will be forced to not sell 2, 000 units to its regular customers.
Required:
If Globe accepts this special order, by what amount will its net operating income increase or decrease?

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Definitions:

Overlap

The similarity of symptoms in two or more different disorders (that is, some of the same criteria apply to different diagnoses), which creates problems with diagnosis. See also comorbidity.

Personality Profiles

Descriptions of an individual's characteristics, traits, or tendencies as they relate to their personality.

Personality Disorder

A type of mental disorder characterized by enduring maladaptive patterns of behavior, cognition, and inner experience.

Cognitive-Behavioural Treatment

A method of therapy focused on correcting problematic emotions, behaviors, and thoughts through a structured, objective-driven process.