Sound Systems Reported the Following Results from the Sale of 24

question 84

Multiple Choice

Sound Systems reported the following results from the sale of 24 000 radios:


Sound Systems expects similar operating results during the current year. Rhythm Systems has offered to purchase 3000 radios at $16 each. Sound Systems estimates approximately 5000 additional units could be made with the capacity currently available in the factory. The owner of Sound Systems is in favour of accepting the order. She feels it would be profitable because no variable selling costs will be incurred. The plant manager is against acceptance because his 'full cost' of production is $17.
Determine the change in profit if the special order is accepted.

• A) $3000 increase
• B) $12 000 increase
• C) $12 000 decrease
• D) $36 000 decrease

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Definitions:

Contextual

Related to, dependent on, or being the context of a situation or event which influences its meaning or effect.

Biological

Relating to biology; pertaining to the science of life or living organisms.

Psychological

Pertaining to the mind or mental processes, often involving emotional and cognitive functions.

Gender Stereotype

Preconceived ideas whereby females and males are arbitrarily assigned characteristics and roles determined and limited by their gender.