The Following Information Relates to a Product Produced by Malkovich

question 30

Multiple Choice

The following information relates to a product produced by Malkovich Company: $$\begin{array} { l r } \text { Direct materials } & \$ 24 \\\text { Direct labor } & 15 \\\text { Variable overhead } & 30 \\\text { Fixed overhead } & \underline { 18 } \\\text { Unit cost } & \$ 87 \\\hline\end{array}$$ 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.
If the firm produces the special order, the effect on income would be a

• A)$360,000 increase.
• B)$360,000 decrease.
• C)$540,000 decrease.
• D)$540,000 increase.

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Definitions:

Genes

Units of heredity made up of DNA that act as instructions to make molecules called proteins, crucial for the development, functionality, and regulation of the body's tissues and organs.

Cytosines

One of the four main nucleobases found in DNA and RNA, which pairs with guanine during the nucleic acids' synthesis.

Genes

Genes are units of heredity made up of DNA. They carry the information responsible for the development of organisms.

Carriers

Individuals who have one copy of a gene for a recessive trait and can pass that gene to their offspring, even if they do not exhibit the trait themselves.