A Project Has Earnings Before Interest and Taxes of $5,750,fixed

question 82

Multiple Choice

A project has earnings before interest and taxes of $5,750,fixed costs of $50,000,a selling price of $13 a unit,and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable cost per unit?

• A) $6.75
• B) $7.00
• C) $7.25
• D) $7.50
• E) $7.75

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Definitions:

Equity Theory

An assumption that how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange.

Expectancy Theory

The assumption that motivation depends not only on how much a person wants something but also on how likely he or she is to get it.