Wallyworld Company Manufactures a Product with the Following Costs Per

question 69

Multiple Choice

Wallyworld Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: The company has the capacity to produce 90,000 units. The product regularly sells for $120.
If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a

• A) $450,000 increase.
• B) $45,000 increase.
• C) $153,000 increase.
• D) $90,000 decrease.

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Definitions:

Cease-and-desist Orders

Legal orders issued by a court or government agency to stop an entity or individual from continuing a particular action.

Civil Penalties

Fines or financial sanctions imposed by a regulatory agency as punishment for violating rules or regulations.

Misappropriation Theory

A legal theory regarding insider trading that holds individuals liable for trading on confidential information.

SEC Rule 10b5-2

A regulation established by the Securities and Exchange Commission (SEC) that clarifies the definition of insider trading, particularly in relation to the misuse of non-public information.