Vandelay Industries Manufactures a Range of Latex Products

question 29

Multiple Choice

Vandelay Industries manufactures a range of latex products. Vandelay recently purchased new equipment to manufacture latex gloves for the medical community. The new machinery costs $70,000 and can produce 40,000 pairs of gloves each day. The raw latex material for each pair of gloves costs $.03 and Vandelay sells the gloves at a wholesale price of $.10 a pair. Vandelay's contribution margin for a pair of gloves is:

• A) $.07.
• B) $.13.
• C) $.10.
• D) $.40.

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Definitions:

Federal Treasury

A government's department responsible for managing public revenue, including issuing currency, collecting taxes, and funding public services.

Permanent

Refers to accounts or records in the general ledger that are not closed at the end of the accounting period, such as assets, liabilities, and equity accounts.

Temporary

Not permanent; lasting for a limited period of time or intended for short-term use.