Snider, Inc., which has excess capacity, received a special order for $4,000$ units at a

price of $$15$ per unit. Currently, production and sales are budgeted for $10,000$ units

without considering the special order. Budget information for the current year

follows.

Sales $$190,000$

Less: Cost of goods sold $145,000$

Gross margin $ $45,000$

Cost of goods sold includes $$30,000$ of fixed manufacturing cost. If the special

order is accepted, the company's income will:

A$.$ increase by $$2,000.$

B$.$ decrease by $$2,000.$

C$.$ increase by $$14,000.$

D$.$ decrease by $$14,000.$

$10.$ Torrey Pines is studying whether to outsource its Human Resources $($H$/$R$)$

activities. Salaried professionals who earn $$390,000$ would be terminated; in

contrast, administrative assistants who earn $$120,000$ would be transferred

elsewhere in the organization. Miscellaneous departmental overhead $($e$.$g$.,$

supplies, copy charges, overnight delivery$)$ is expected to decrease by $$30,000,$ and

$$25,000$ of corporate overhead, previously allocated to Human Resources, would

be picked up by other departments. If Torrey Pines can secure needed H$/$R

services locally for $$410,000,$ how much would the company benefit by

outsourcing?

A$.$ $$10,000.$

B$.$ $$35,000.$

C$.$ $$130,000.$

D$.$ $$155,000.$

E$.$ Nothing, as it would be cheaper to keep the department open.