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.

Comprehend the notions of self-efficacy and its influence on personal outcomes.

Evaluate the methodologies and tools for assessing personality, stressing reliability and validity.

Understand the financial benefits and synergies derived from mergers and acquisitions.

Identify the impact of mergers and acquisitions on shareholders and the role of stock.

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Definitions:

MC (Marginal Cost)

The rise in overall expenses associated with the production of an extra unit of a product or service.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no profit or loss.

Shutdown Point

The shutdown point is the level of output and price at which a business covers its variable costs; operating below this point would lead the firm to losses greater than its fixed costs.

AVC (Average Variable Cost)

The cost of labor, materials, and other variable inputs divided by the quantity of output produced.