The Following Information Relates to a Product Produced by Malkovich

question 2

Multiple Choice

The following information relates to a product produced by Malkovich Company: 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.

---

Definitions:

Trade Barriers

Measures imposed by governments to regulate or restrict international trade, including tariffs, quotas, embargoes, and standards.

Adverse Effects

Negative outcomes or damages that result from an action or policy.

Alleged Benefits

Claimed advantages or positive outcomes that may not have been fully verified or proven.

Voluntary Export Restriction

An agreement by a country to limit the quantity of goods exported to another country to avoid tariffs or quotas.