The Fast Trax Company Manufactures Adding Machines

Multiple Choice

The Fast Trax Company manufactures adding machines.The company's capacity is 5,000 units per month;however,it currently is selling only 3,000 units per month.Company X has asked Fast Trax to sell 1,000 adding machines at $25 each.Normally,Fast Trax sells its product for $35.The company records report each adding machine's full absorption costs are $30 which includes fixed costs of $20.If Fast Trax was to accept Company X's offer,what would be the impact on Fast Trax's operating income?

A) Additional profit of $15,000
B) Additional profit of $25,000
C) A loss of $5,000 on this order
D) A loss of $10,000 on this order