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Two months ago, Air-tite Corporation purchased 5,600 pounds of Hydrol, paying $19,600. The demand for this product has been very strong since the acquisition, with
Two months ago, Air-tite Corporation purchased 5,600 pounds of Hydrol, paying $19,600. The demand for this product has been very strong since the acquisition, with the market price jumping to $4.55 per pound. (Air-tite can buy or sell Hydrol at this price.) The company recently received a special-order inquiry, one that would require the use of 5,000 pounds of Hydrol. Which of the following is (are) relevant in deciding whether to accept the special order? 8 04:45:25 Multiple Choice Print The 600-pound remaining inventory of Hydrol. The $4.55 market price. o The $3.50 purchase price. o 5,600 pounds of Hydrol. o o Two or more of the other factors are relevant. 29 Elkhorn, Inc., which has excess capacity, received a special order for 4,600 units at a price of $17 per unit. Currently, production and sales are anticipated to be 11,000 units without considering the special order. Budget information for the current year follows. ( 8 04:45:12 Sales Less: Cost of goods sold Gross margin $242,000 176,000 $ 66,000 Print Cost of goods sold includes $44,000 of fixed manufacturing cost. If the special order is accepted, the company's income will: Multiple Choice 0 increase by $4,600. 0 decrease by $4,600. 0 increase by $23,000. 0 decrease by $23,000. 0 None of the answers is correct
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