A Project Has Earnings Before Interest and Taxes of $24,900

question 417

Multiple Choice

A project has earnings before interest and taxes of $24,900, fixed costs of $48,700, a selling price of $16 a unit, and a sales quantity of 24,500 units per year. Annual depreciation is $14,600. What is the variable cost per unit?

• A) $12.40
• B) $12.50
• C) $12.60
• D) $12.70
• E) $12.80

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Definitions:

Current Liabilities

Financial obligations or debts a company is due to pay within a year.

Product Warranty

A promise made by a seller to a buyer to repair or replace a product within a specific time frame if it is found to be defective.

Warranty Obligations

Liabilities representing a company's responsibility to repair or replace products that fail to meet specified standards of performance.

Quarterly Entries

Financial records or transactions that are recorded or updated every three months within a fiscal year.