Each Month Fig Company Produces 11,000 Units of a Product

question 110

Multiple Choice

Each month Fig Company produces 11,000 units of a product that sells for $18 per unit,and has variable costs of $12 per unit.Total fixed costs for the month are $77,000.A special order is received for 5,000 units at a price of $14 per unit.Fig Company has adequate capacity for the special order.If Fig Company accepts the special order,what is the profit to Fig Company?

• A)There is no profit; it is loss.
• B)$10,000
• C)$22,000
• D)$99,000

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Definitions:

Free Trade

An economic policy that allows imports and exports to flow freely between countries without tariffs, quotas, or restrictions.

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A military conflict fought between the United States and the British Empire (and their respective allies) from 1812 to 1815, largely over issues of trade and maritime rights.

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A form of government in which power resides in elected individuals representing the citizen body and government leaders exercise power according to the rule of law.