Dakota Company has been producing and selling 42,000 hats a year. There are no beginning and ending inventories. The Dakota Corporation has the capacity to produce 52,000 hats. The following data is available:

Selling price per unit $30
Variable manufacturing costs per unit $13
Variable selling and administrative costs per unit $7
Total fixed manufacturing costs $126,000
Total fixed selling and administrative costs $84,000

If a special order is accepted for 10,000 hats at a price of $25 per unit, net income would .

A) increase by $20,000
B) increase by $50,000
C) increase by $90,000
D) decrease by $24,000

B) increase by $50,000

Explanation:

The computation of the incremental revenue is shown below:

= Number of units accepted in case of special order × price per unit - variable manufacturing cost - variable selling and administrative cost

= 10,000 units × $25 - $130,000 - $70,000

= $250,000 - $130,000 - $70,000

= $50,000

The variable manufacturing cost is

= 10,000 units  × $13

= $130,000

And, the Variable selling and administrative costs is

= 10,000 units  × $7

= $70,000

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

hope this

hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )