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Anderson Company (AC) is located in Victoria and is in the desk lamp manufacturing business. AC has been presented with an offer from a new

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Anderson Company ("AC") is located in Victoria and is in the desk lamp manufacturing business. AC has been presented with an offer from a new customer to purchase 10,000 units of model JJ at a sales price of $40 each. In terms of proximity, the new customer is far enough away from the company's other customers that existing sales are not expected to be affected. AC normally produces 130,000 units of JJ per year but only plans to produce and sell 95,000 in the coming year. The normal sales price is $50 per unit. Per unit cost information for the normal level of activity is presented in the chart below: Variable overhead $6.00 Fixed overhead $6.50 Direct materials $11.50 Direct labour $2.00 Total cost $26.00 Fixed overhead will not be affected by whether or not the special order is accepted. Required: Use the above information to answer the following questions: Question 1 (0.5 points) When considering the acceptance of the special order, sales price would be considered: Neither a relevant or irrelevant benefit An irrelevant benefit Question 1 (0.5 points) When considering the acceptance of the special order, sales price would be considered: Neither a relevant or irrelevant benefit An irrelevant benefit A relevant benefit Question 2 (0.5 points) When considering the acceptance of the special order, direct materials would be considered: An irrelevant cost Neither a relevant or irrelevant cost A relevant cost Question 3 (0.5 points) Question 2 (0.5 points) When considering the acceptance of the special order, direct materials would be considered: An irrelevant cost Neither a relevant or irrelevant cost A relevant cost Question 3 (0.5 points) When considering the acceptance of the special order, direct labour would be considered: A relevant cost Neither a relevant or irrelevant cost An irrelevant cost Question 4 (0.5 points) Question 4 (0.5 points) When considering the acceptance of the special order, variable overhead would be considered: An irrelevant cost Neither a relevant or irrelevant cost A relevant cost Question 5 (0.5 points) When considering the acceptance of the special order, fixed overhead would be considered: Neither a relevant or irrelevant cost A relevant cost An irrelevant cost Question 5 (0.5 points) When considering the acceptance of the special order, fixed overhead would be considered: Neither a relevant or irrelevant cost O A relevant cost An irrelevant cost Question 6 (3 points) By how much will operating income change in total if the special order is accepted? Enter as a positive number A/ Question 7 (1.5 points) If per unit cost information had included fixed overhead of $9.50 instead of $6.50, by how much will operating income change in total if the special order is accepted? Enter as a positive number A/

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