A Customer Has Requested That Inga Corporation Fill a Special

question 22

Multiple Choice

A customer has requested that Inga Corporation fill a special order for 2,000 units of product K81 for $25.00 a unit.While the product would be modified slightly for the special order,product K81's normal unit product cost is $19.90: Direct labor is a variable cost.The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like modifications made to product K81 that would increase the variable costs by $1.20 per unit and that would require an investment of $10,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales.The company has ample spare capacity for producing the special order.If the special order is accepted,the company's overall net operating income would increase (decrease) by:

• A)$13,000
• B)$(9,700)
• C)$10,200
• D)$(2,200)

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Definitions:

Blindsight

A phenomenon where people who are clinically blind can respond to visual stimuli without consciously seeing them.

Circadian Rhythm

The physical, mental, and behavioral changes that follow a 24-hour cycle, responding primarily to light and darkness in an organism's environment.

Menopause

A natural biological process marking the end of a woman's reproductive years, characterized by the cessation of menstruation and a decline in the production of hormones such as estrogen and progesterone.

Morning-Oriented

Preferring activities or being more alert and active in the morning hours.