PNY Currently Sells Its Primary Product for $85 Per Unit

question 82

Multiple Choice

PNY currently sells its primary product for $85 per unit, with a profit margin of 30%. Cost of goods sold totals 40% of the product's total cost. PNY's managers are considering implementing a kaizen costing system. PNY's current product cost (direct costs and manufacturing overhead) per unit is:

• A) $59.50
• B) $23.80
• C) $25.50
• D) $15.30

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Definitions:

Tax Rate

The rate at which a person or business is taxed by the government on their earnings or revenue.

Costs

The monetary value that a company incurs to produce goods or services, which may include expenses related to labor, materials, and overhead.

CCA Class

Stands for Capital Cost Allowance Class, a categorization in Canadian tax law used to determine the depreciation rate for tax purposes on tangible capital assets.

Book Value

The net value of a company's assets, minus its liabilities and intangible assets, as recorded on the balance sheet.