Pima,IncManufactures Calculators That Sell for $40 Each

question 14

Multiple Choice

Pima,Inc.manufactures calculators that sell for $40 each.Each calculator uses $15 in direct materials and $5 in direct labor per unit.Pima has two activities: Machining,which is applied at the rate of $4 per machine hour,and Finishing,which is applied at the rate of $20 per batch.This month,Pima made 400 calculators,using 1,000 machine hours in 40 batches.What is the gross profit for one calculator?

• A)$8
• B)$20
• C)$25
• D)$35

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Definitions:

Demand

An economic principle referring to the consumer's desire and willingness to pay for a specific quantity of a good or service at a given time.

Book

A published material that features pages bound together on one side and encased within protective covers.

Marginal Revenue

The additional income received from selling one more unit of a product or service.

Demand Function

A mathematical representation showing the relationship between the quantity of a good that consumers are willing to buy and its price, along with other factors like income and prices of related goods.