The Following Information Relates to a Product Produced by Malkovich

question 106

Multiple Choice

The following information relates to a product produced by Malkovich Company: $$\begin{array} { l r } \text { Direct materials } & \$ 24 \\\text { Direct labor } & 15 \\\text { Variable overhead } & 30 \\\text { Fixed overhead } & \underline { 18 } \\\text { Unit cost } & \$ 87\end{array}$$ Fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 60,000 units for $90 each.
The incremental cost per unit associated with the special order is

• A)$64.
• B)$69.
• C)$81.
• D)$84.

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Definitions:

Intrinsic Motivation

The drive to engage in activities for their own sake, for the pleasure and satisfaction derived from participation, rather than for some separable consequence.

Extrinsic Motivation

Motivation that is driven by external rewards such as money, fame, grades, and praise.

Reward

An outcome or event that strengthens the likelihood of a behavior by providing a positive consequence or satisfaction to the subject.

Intrinsic Motivation

Motivation driven by an interest or enjoyment in the task itself, rather than relying on external pressures or rewards.