Comfort Cloud manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year but currently produces and sells 75,000 seats per year. The following information relates to current production of seats:

Sales price per unit	$400
Variable costs per unit:
Manufacturing	$220
Marketing and administrative	$50
Total fixed costs:
Manufacturing	$750,000
Marketing and administrative	$200,000

If a special sales order is accepted for 6,500 seats at a price of $325 per unit, and fixed costs remain unchanged, how would operating income be affected? (Note: Assume regular sales are not affected by the special order.)

	Increase by $5,500,000
	Increase by $2,112,500
	Decrease by $357,500
	Increase by $357,500

Question

Budget committees include all of the following people except the

	research and development manager.
	CEO.
	shareholder.
	marketing manager.

Question

Lough Company prepared the following purchases budget:

Month	Budgeted Purchases
June	$40,000
July	$43,000
August	$39,600
September	$46,000
October	$49,100

All purchases are paid for as follows: 20% two months after purchase, 55% in the following month, and 25% in the month of purchase.

What are the cash disbursements in August to account for the June purchases at Lough Company?

	$10,000
	$25,300
	$8,000
	$22,000

Question