The Immanuel Company Has Just Obtained a Request for a Special

question 56

Multiple Choice

The Immanuel Company has just obtained a request for a special order of 6,000 jigs to be shipped at the end of the month at a selling price of $7 each. The company has a production capacity of 90,000 jigs per month with total fixed production costs of $144,000. At present, the company is selling 80,000 jigs per month through regular channels at a selling price of $11 each. For these regular sales, the cost for one jig is: If the special order is accepted, Immanuel will not incur any selling expense; however, it will incur shipping costs of $0.30 per unit. Total fixed production cost would not be affected by this order.
-If Immanuel accepts this special order,the change in monthly net operating income will be a:

• A)$12,600 increase
• B)$14,400 increase
• C)$3,600 increase
• D)$1,800 increase

Grasp the concepts of absorption costing and its alternatives in inventory accounting.

Recognize the importance and methods of inventory valuation, including the lower of cost or market method.

Understand the differences in inventory accounting standards between U.S. GAAP and IFRS.

Comprehend the impact of inventory accounting choices on tax liability and financial performance.

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Definitions:

Response Prevention

A treatment technique, often used for OCD, where the individual refrains from performing their habitual response to a feared stimulus.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to restrictive eating habits, severe weight loss, and a distorted body image.

Death Rate

The number of deaths in a given population during a specific period, usually expressed per 1,000 or 100,000 individuals.

Binge Eating Disorder

An eating disorder characterized by recurrent episodes of eating large quantities of food, often quickly and to the point of discomfort.