Answer:
B) Yes No
Explanation:
Materials cost are incremental and relevant whereas Depreciation on equipment with no resale value are irrelevant.
Which correctly identifies a condition which must be met for creditors to force a firm into involuntary bankruptcy?
On December 30, you decide to make a $2,500 charitable donation. (Assume you itemize your deductions.) (a) If you are in the 24 percent tax bracket and you expect to itemize your deductions, how much will you save in taxes for the current year
Answer:
$600
Explanation:
Calculation to determine how much will you save in taxes for the current year
Using this formula
Tax savings = Tax rate × Tax deduction
Let plug in the formula
Tax savings= 0.24 × $2500
Tax savings =$600
Therefore how much will you save in taxes for the current year is $600
Trudeau’s Body Shop incurs total costs given by TC = 2,400 + 100 Q. If the price it charges for a paint job is $120, what is its break-even level of output?
Answer:
The break-even level of output is 120 units.
Explanation:
Since Total Cost formula is provided, we can use elements contained in the formulae to determine the break-even level of output.
The break-even level of output is the level of activity where a firm makes neither a Profit nor a Loss. In other words, Profit = $0
Step 1 : Collect data
So given :
TC = 2,400 + 100 Q
This means :
Fixed Costs = $2,400
Variable Costs = $100 per unit
Additional Information gives :
Selling Price per unit = $120
Step 2 : Determine the break-even level of output
Break even (units) = Fixed Costs ÷ Contribution per unit
where,
Contribution per unit = Selling Price - Variable Cost
= $20
thus,
Break even (units) = $2,400 ÷ $20
= 120 units
Conclusion :
The break-even level of output is 120 units.
Exercise 4-10 Preparing adjusting and closing entries for a merchandiser LO P3 The following list includes selected permanent accounts and all of the temporary accounts from the December 31 unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system. Debit Credit Merchandise inventory $ 40,000 Prepaid selling expenses 7,600 Dividends 53,000 Sales $ 609,000 Sales returns and allowances 21,500 Sales discounts 7,000 Cost of goods sold 252,000 Sales salaries expense 68,000 Utilities expense 25,000 Selling expenses 46,000 Administrative expenses 125,000 Additional Information Accrued and unpaid sales salaries amount to $1,800. Prepaid selling expenses of $2,900 have expired. A physical count of year-end merchandise inventory is taken to determine shrinkage and shows $34,700 of goods still available. (a) Use the above account balances along with the additional information, prepare the adjusting entries. (b) Use the above account balances along with the additional information, prepare the closing entries.
Answer:
Kumi Emiko Co.
a) Adjusting Journal Entries:
Debit Sales Salaries expense $1,800
Credit Sales Salaries Payable $1,800
To record accrued sales salaries.
Debit Selling expense $2,900
Credit Prepaid selling expense $2,900
To record expired selling expense.
Debit Cost of goods sold $5,300
Credit Merchandise Inventory $5,300
To record determined shrinkage in merchandise inventory.
b) Closing Journal Entries:
Debit Sales revenue $ 609,000
Credit Sales returns and allowances $21,500
Credit Sales discounts $7,000
Credit Income summary $580,500
To close the net sales revenue to the income summary.
Debit Income Summary $526,000
Debit:
Cost of goods sold $257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000
To close cost of goods sold and expenses to the income summary.
Debit Income Summary $54,500
Credit Retained Earnings $54,500
To close the income summary to retained earnings.
Debit Retained Earnings $53,000
Credit Dividends $53,000
To close the dividend to retained earnings.
Explanation:
a) Data and Calculations:
Debit Credit
Merchandise inventory $ 40,000
Prepaid selling expenses 7,600
Dividends 53,000
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 252,000
Sales salaries expense 68,000
Utilities expense 25,000
Selling expenses 46,000
Administrative expenses 125,000
Analysis of additional Information:
Sales Salaries expense $1,800 Sales Salaries Payable $1,800
Selling expense $2,900 Prepaid selling expense $2,900
Cost of goods sold $5,300 Merchandise Inventory $5,300
Adjusted accounts:
Debit Credit
Merchandise inventory $ 34,700
Prepaid selling expenses 4,700
Dividends 53,000
Sales Salaries Payable 1,800
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000
3. The USD depreciates 2% versus the JPY. The USD appreciates 1% versus the MXN. What is the approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate
Answer:
The approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate is 3%.
Explanation:
The approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate can be stated using the folowing 3 steps.
Step 1. State the initial exchange rates of the currency pairs.
Let first assume the initial exchange rates are as follows:
USD1 = JPY1
USD1 = MXN1
Therefore, we have the initial cross rate as follows:
MXN1 = USD1 = JPY1
MXN1 = JPY1
Step 2. Determine the new exchange rates
The new exchange rates can be determined as follows:
When the USD depreciates 2% versus the JPY, this implies that USD1 * (100% + 2%) = USD1.02 has to be exchanged for JPY1. Therefore, we now have:
USD1.02 = JPY1, or
USD1 = JPY1/1.02
USD1 = JPY0.98
Also, when The USD appreciates 1% versus the MXN, this implies that USD1 * (100% - 1%) = USD0.99 has to be exchanged for MXN1. Therefore, we now have:
USD0.99 = MXN1, or
USD1 = MXN1/0.99
USD1 = MXN1.01
Therefore, we have the new cross rate as follows:
MXN1.01 = USD1 = JPY0.98
MXN1.01 = JPY0.98
MXN1.01 / 1.01 = JPY0.98/1.01
MXN1 = JPY0.97, or
MXN1/0.97 = JPY0.97/0.97
MXN1.03 = JPY1
Therefore, the new exchange rates are as follows:
USD1.02 = JPY1
USD0.99 = MXN1
MXN1.03 = JPY1
c. Determination of appreciation or depreciation we might see in the MXN/JPY
Percentage of depreciation of MXN against JPY = ((Initial MXN/JPY - New MXN/JPY) / Initial MXN/YPY) * 100 = ((1.03 - 1) / 1) * 100 = 3%
Since the percentage of depreciation of MXN against JPY is 3%, this also implies that the percentage of appreciation of JPY against MXN is 3%.
Therefore, the approximate appreciation or depreciation we might see in the MXN/JPY cross exchange rate is 3%.
A seller's opportunity cost measures the a. value of everything she must give up to produce a good. b. amount she is paid for a good minus her cost of providing it. c. out-of-pocket expenses to produce a good but not the value of her time. d. consumer surplus.
Answer:
a. value of everything she must give up to produce a good.
Explanation:
The opportunity cost of the seller determines the value of each and every thing in which the seller gives up the production of the a good in order to generating an output
So as per the given situation, the option a is correct
And, the rest of the options seems incorrect
You are considering a stock that is expected to pay dividends during the next five years of $0.50, $0,52, $0,54, $0,56 and $0.58. You estimate that you can sell the stock for $100 at the end of five years. Your required rate of return is 15% and the stock is currently selling for $65. If you purchase the stock, what rate of return do you expect to earn
Answer:
9.7%
Explanation:
The rate of return can be determined using a financial calculator
Cash flow in year 0 = -65
Cash flow in year 1 = $0.50
Cash flow in year 2 = $0.52
Cash flow in year 3 = $0.54
Cash flow in year 4 = $0.56
Cash flow in year 5 = $0.58 + $100
Rate of return = 9.7%
To find the rate of return using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Valley Spa purchased $10,200 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 14% promissory note for $10,200. If the note is dishonored, but Tubman intends to continue collection efforts, what is the journal entry to record the dishonored note? (Use 360 days a year.)
Answer:
Debit Accounts Receivable—Valley Spa $10,438 Credit Interest Revenue $238
Credit Notes Receivable $10,200.
Explanation:
Preparation of the the journal entry to record the dishonored note
Debit Accounts Receivable—Valley Spa $10,438
($10,200+$238)
credit Interest Revenue $238
($10,200 x 14% x 60/ 360)
Credit Notes Receivable $10,200
(To record the dishonored note)
A bond that pays interest semiannually has a price of $941.35 and a semiannual coupon payment of $26.00. If the par value is $1,000, what is the current yield
Answer:
5.52%
Explanation:
Calculation to determine the current yield
Current yield = ($26.00 × 2)/$941.35
Current yield=$52/$941.35
Current yield= .0552*100
Current yield= 5.52%
Therefore the Current yield is 5.52%
Amanda is playing a game of chance in which she rolls a number cube with sides numbered from to 1 to 6. The number cube is fair, so a side is rolled at random. This game is this: Amanda rolls the number cube once. She wins $1 if a 1 is rolled, $2 if a 2 is rolled, $3 if a 3 is rolled, and 4 if a 4 is rolled. She loses $0,50 if a 4, 5 or 6 is rolled.
(a) Find the expected value of playing the game.
(b) What can Elsa expect in the long run, after playing the game many times?
1) Elsa can expect to gain money. She can expect to win__dollars per roll.
2) Elsa can expect to lose money. She can expect to lose___dollars per roll.
3) Elsa can expect to break even (neither gain nor lose money).
Answer:
a. 0.75
b. elsa can expect to gain money. 0.75$
Explanation:
x = 1/6 = 0.166667
given an outcome of 1,
1$ win * 0.166667 = 0.166667
given an outcome of 2,
$2 win * 0.166667 = 0.33333
given an outcome of 3,
$3 win*0.166667 = 0.5
remember that if she has an out come of 4, 5 and 6 she loses 0.5 dollars
given an outcome of 4,
-$0.5 * 0.166667 = -0.083333
given an outcome of 5,
-$0.5 * 0.166667 = -0.083333
given an outcome of 6,
-$0.5 * 0.166667 = -0.083333
The expected value of playing the game = 0.166667+0.333333+0.5-0.083333-0.083333-0.083333
= 0.750001
expected value of plying game = 0.75
b. in the long run, after playing the game many times, Elsa can expect to gain money. she can expect to win 0.75$ per role. option 1
Which of the strategies to enter global markets do you think would be best for a small, 100 person company manufacturing special dog collars
Answer:
Exporting by means of:
Local representative Online salesExplanation:
It would be best that the company engages in exports for the time being because it dos not require much funds to be used and so expenses are less.
The company could find a local representative in the countries that it would like to sell to and use that representative as a middleman to sell their goods there.
The company could also cut out the middle man and directly sell to consumers on the internet through websites dedicated to the sale of their kind of goods.
One of the best sources of precall information is a prospect's own salespeople because they empathize with the salesperson's situation.
a. True
b. False
Answer:
a. True
Explanation:
In the case when the information is precalled so here the sources that considered to be best should be the own salespeople as it would emphathize the situation of the sales person
So as per the given situation, the given statement is true
Hence, the option a is correct
Therefore, the second option is wrong
Many economists oppose a constitutional amendment that would require a balanced budget for the federal government because it would probably make the business cycle more volatile.
a. True
b. False
Answer:
The statement is False.
Explanation:
What is a constitutional balanced budget amendment?The balanced budget amendment's requirement that total government spending cannot exceed total receipts collected in the same year has far-reaching ramifications for Social Security.
What is Balanced Budget?A balanced budget is one in which total revenues equal or exceed total costs. After a full year of revenues and expenses have been incurred and recorded, a budget can be declared balanced. Budget deficits, according to proponents of a balanced budget, burden future generations with debt.
Example of Balanced Budget-If Michael and Jessica earn $75,000 per year but spend only $70,000, they have a balanced budget because their expenses are equal to or less than their income. They can use the extra $5,000 in their budget to pay off debt or meet their savings goals in this situation.
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If a company can implement cash management systems and save three days by reducing remittance time and one day by increasing disbursement time based on $2,000,000 in average daily remittances and $2,500,000 in average daily disbursements and its return on freed-up funds is 10%, what is the maximum that it should spend on the system
Answer: $850,000
Explanation:
The maximum amount that'll be spent on the system goes thus:
Additional collections will be:
= $2,000,000 × 3 days
= $6,000,000
Delayed disbursements will be,:
= $2,500,000 × 1 day
= $2,500,000
Then, the increment on funds will be:
= Additional collection + Delayed disbursement
= $6,000,000 + $2,500,000
= $8,500,000
Hence, maximum amount will be:
= 10% × $8,500,000
= $850,000
A cleaning product company is having trouble with the pH control of one of their products. The product should be slightly basic but the pH is too high. What could the company try to correct the pH of the product
Answer:
sodium hydroxide to raise and acidic solutions to drop ph
Explanation:
how to lower and make highee
Journalizing transactions using the direct write-off method versus the allowance method During August 2018, Lima Company recorded the following
. Sales of $133,300 ($122,000 on account $11,300 for cash). Ignore Cost of Goods Sold.
. Collections on account, $106,400.
. Write-offs of uncollectible receivables, $990.
. Recovery of receivable previously written off, $800.
Requirements
1. Journalize Lima's transactions during August 2018, assuming Lima uses the direct write-off method
2. Journalize Lima's transactions during August 2018, assuming Lima uses the allowance method.
Answer:
Lima Company
Journal Entries during August 2018:
1. Direct write-off method:
Debit Accounts Receivable $122,000
Debit Cash $11,300
Credit Sales Revenue $133,300
To record the sale of goods on credit and for cash.
Debit Cash $106,400
Credit Accounts Receivable $106,400
To record the cash receipts on account.
Debit Bad Debts Expense $990
Credit Accounts Receivable $990
To write-off uncollectible accounts.
Debit Cash $800
Credit Bad Debts Expense $800
To record the recovery of previously written off accounts.
2. Allowance Method:
Debit Accounts Receivable $122,000
Debit Cash $11,300
Credit Sales Revenue $133,300
To record the sale of goods on credit and for cash.
Debit Cash $106,400
Credit Accounts Receivable $106,400
To record the cash receipts on account.
Debit Allowance for Uncollectible Accounts $990
Credit Accounts Receivable $990
To record the write-off of uncollectible accounts.
Debit Accounts Receivable $800
Credit Allowance for Uncollectible Accounts $800
To reinstate the recovery of previously written off accounts.
Debit Cash $800
Credit Accounts Receivable $800
To record the recovery of previously written off accounts.
Explanation:
a) Data and Analysis:
1. Direct write-off method:
Accounts Receivable $122,000 Cash $11,300 Sales Revenue $133,300
Cash $106,400 Accounts Receivable $106,400
Bad Debts Expense $990 Accounts Receivable $990
Cash $800 Bad Debts $800
2. Allowance Method:
Accounts Receivable $122,000 Cash $11,300 Sales Revenue $133,300
Cash $106,400 Accounts Receivable $106,400
Allowance for Uncollectible Accounts $990 Accounts Receivable $990
Accounts Receivable $800 Allowance for Uncollectible Accounts $800
Cash $800 Accounts Receivable $800
Resource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.
Answer:
fall
rise
Explanation:
If the cost of resource x falls, it becomes cheaper to produce good y. This leads to an increase in supply of y. the supply curve of good y shifts out. As a result, equilibrium price falls and quantity rises
Which of the following is NOT an accurate description of modern marketing?
Marketing involves managing profitable customer relationships.
Marketing involves satisfying customers' needs.
O Marketing is the creation of value for customers.
Marketing emphasizes selling and advertising exclusively.
O Marketing is building value-laden exchange relationships with customers.
I'm stuck between
Marketing is the creation of value for customers and
Marketing emphasizing selling and advertising exclusively l.
Llewelyn Company purchased 1,000 shares of its own $10 par value common stock when the market price of the stock was $36 per share. What journal entries would be used to record the purchase of treasury stock?
Answer: Increase the treasury stock account and decrease the cash account by $36,000.
Explanation:
The journal entries that would be used to record the purchase of treasury stock will be to increase the treasury stock account and decrease the cash account by $36,000.
Note that the $36000 was calculated as:
= 1,000 shares × $36 per share
= $36,000
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond
Answer:
Bond Price= $846.3
Explanation:
Giving the following information:
YTM= 0.05
Maturity= 15*2= 30 semesters
Par value= $1,000
Coupon= $40
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 40*{[1 - (1.05^-30)] / 0.05} + [1,000 / (1.05^30)]
Bond Price= 614.90 + 231.38
Bond Price= $846.3
Alternative Financing Plans
Owen Co. is considering the following alternative financing plans:
Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000 $3,400,000
Issue preferred $1 stock, $20 par — 3,600,000
Issue common stock, $25 par 5,000,000 3,000,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming income before bond interest and income tax is $750,000.
Enter answers in dollars and cents, rounding to the nearest whole cent.
Plan 1 $_____________________ Earnings per share on common stock
Plan 2 $_______________________ Earnings per share on common stock
Answer:
Owen Co.
Alternative Financing Plans
Plan 1 Plan 2
Earnings per share $1.20 $1.06
Explanation:
a) Data and Calculations:
Plan 1 Plan 2
Issue 7% bonds (at face value) $5,000,000 $3,400,000
Issue preferred $1 stock, $20 par — 3,600,000
Issue common stock, $25 par 5,000,000 3,000,000
Income tax is estimated at 40% of income.
EBIT = $750,000 $750,000
Interest on bonds 350,000 238,000
Income before taxes $400,000 $512,000
Income tax 160,000 204,800
Net income $240,000 $307,200
Preferred dividend - $180,000
Earnings available to common
stockholders $240,000 $127,200
Outstanding shares 200,000 120,000
Earnings per share $1.20 $1.06
$1.20 ($240,000/200,000) $1.06 ($127,200/120,000)
Preferred stock dividend rate = 5% ($1/$20 * 100)
Preferred stock dividend = $180,000 ($3,600,000/$20 * $1)
or 5% of $3,600,000
Drew Davis goes to his local bank to get help developing a financial plan and making investment decisions. Which of the more recent services banks offer is Drew taking advantage of
Answer: b. Getting financial advice
Explanation:
As the number of banks in the world increases, banks are having to offer more products and services apart from their traditional roles as lenders in order to remain relevant and competitive. One such product is giving financial advice.
Banks now offer advice on how to make better investment decisions, develop financial plans and even organize your estate. This is what Drew Davis was taking advantage of here.
In this market, the equilibrium hourly wage is $ , and the equilibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a .
Answer:
The equilibrium hourly wage is the wage where the curve of supply of labor intersects with that of the demand for labor. The same goes for the equilibrium quantity of labor.
The equilibrium hourly wage is $10, and the equilibrium quantity of labor is 450 thousand workers.
If a Senator introduces a minimum hourly wage, this is considered a Price Floor.
Price floors are prices that that the government mandates that one cannot charge below for a good or service. If there is a price floor on cake for instance, a person is not allowed to charge less than that price floor for cake. The Senator's bill is therefore saying that people should not be paid less than $6 an hour.
If the substitution effect of the real interest rate on saving is larger than the income effect of the real interest rate on saving, then a rise in the real interest rate leads to a ________ in consumption and a ________ in saving, for someone who's a lender.
Answer:
rise, fall
Explanation:
In the case when the subsitution effect with respect to the real rate of interest should be saved and more than the income effect on the real rate of interest so if there is an increased in the real rate of interest so there is an increase in the consumption also there is the fall in the savings
Also, if there is a more income effect, the consumption should rise and the savings would decline
Therefore the rise and fall should be considered to fill the blanks
Assume that as their leader, you wanted to influence minimum wage earners in a plastic bottle recycling center to work faster. Which one or two influence tactics are likely to be effective
Answer:
An effective leader is one who is able to influence his team through his communication and interpersonal skills.
In order to achieve greater speed and productivity at work, some influencing tactics that can be effective in a recycling center where workers earn a minimum wage may be associated with the leader's ability to empathize with the team, recognizing the difficulties and challenges of the work, but acting in a comprehensive, ethical way and helping them in their demands, exercising practical leadership, where the leader is the first to set a positive example of what he wants to achieve.
Frans paid R9600 as interest on a loan he took 5 years ago at 16% rate. What's was the amount he took as loan?
[tex]\bold{{Answer}}[/tex]
Any choices?
The amount he took as loan was Rs.7680
What is loan?The term loan refers to a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. In many cases, the lender also adds interest and/or finance charges to the principal value which the borrower must repay in addition to the principal balance. Loans may be for a specific, one-time amount, or they may be available as an open-ended line of credit up to a specified limit. Loans come in many different forms including secured, unsecured, commercial, and personal loans.
A loan is a form of debt incurred by an individual or other entity. The lender—usually a corporation, financial institution, or government—advances a sum of money to the borrower. In return, the borrower agrees to a certain set of terms including any finance charges, interest, repayment date, and other conditions. In some cases, the lender may require collateral to secure the loan and ensure repayment.
What are methods of calculating interest on loan?"The interest rate on loans can be set at simple or compound interest. Simple interest is interest on the principal loan. Banks almost never charge borrowers simple interest. For example, let's say an individual takes out a $300,000 mortgage from the bank, and the loan agreement stipulates that the interest rate on the loan is 15% annually. As a result, the borrower will have to pay the bank a total of $345,000 or $300,000 x 1.15. Compound interest is interest on interest and means more money in interest has to be paid by the borrower. The interest is not only applied to the principal but also the accumulated interest of previous periods. The bank assumes that at the end of the first year, the borrower owes it the principal plus interest for that year. At the end of the second year, the borrower owes it the principal and the interest for the first year plus the interest on interest for the first year."
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In the 2008 global financial crisis, many investors considered the US economy a safe place to move their assets What is the predicted impact of this inflow of financial capital to the US, which is a large, open economy, on the US interest rate and the US exchange rate, holding other factors constant Illustrate your answer graphically and explain in words.
Answer:
Good for US interest rate and the US exchange rate.
Explanation:
The predicted impact of this inflow of financial capital to the United states of America is good for the economy as well as for US interest rate and the US exchange rate when the movement of assets occur to the United states of America. The economy of the United states of America gets to be better due to this action of investors. This 2008 global financial crisis greatly damaged the economy of United states of America so this action bring some betterment in the economy.
If two firms are identical in all respects except that one has more of the fixed input capital than another, the marginal product curve for the firm with more capital: Group of answer choices will lie above the marginal product curve for the firm with less capital. must equal the marginal product curve for the firm with less capital. will lie below the total marginal curve for the firm with less capital. will show no diminishing marginal returns.
Answer: will lie above the marginal product curve for the firm with less capital.
Explanation:
Capital is needed to produce goods and services and ideally speaking, when more capital is invested, more goods and services will be able to be produced because more should bring in more.
It is the same case here, if the companies are similar in everything except capital invested, the company with more capital will be able to produce more goods and services which will lead to their marginal product curve lying above the marginal product curve of the company with less capital.
Risk assessment is an evaluation of the PPS supported by a number of analysis methodologies, including :__________.
Answer:
Threat analysis Consequence analysis Event and Fault tree analyses Vulnerability analysisExplanation:
Threat Analysis
Involves the identification of areas of the system in question that are vulnerable to risk and then identifying what those risks are.
Consequence Analysis
With consequence analysis, the possible effects of the risks identified will be analyzed to see how much damage they can cause.
Event and Fault tree analyses
Here a tree is used to show all of the possible effects of a risky activity failing. It is used to find out the cause of the worst case scenario.
Vulnerability analysis
As the term implies, vulnerability analysis is done to see which parts of a system are at risk and how vulnerable they are to this risk and then ranking these vulnerabilities so that they can be prioritized.
Dake Corporation's relevant range of activity is 2,300 units to 5,500 units. When it produces and sells 3,900 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials $ 6.80
Direct labor $ 4.00
Variable manufacturing overhead $ 1.55
Fixed manufacturing overhead $ 2.50
Fixed selling expense $ 1.15
Fixed administrative expense $ 0.85
Sales commissions $ 0.95
Variable administrative expense $ 0.85
If 2,900 units are produced, the total amount of direct manufacturing cost incurred is closest to:
a. $39,875
b. $31,320
c. $35,815
d. $43,065
