Calculate the External Financing Needed Given the Following Information: Current

question 194

Multiple Choice

Calculate the external financing needed given the following information: current sales = $275,000; current sales capacity = 75%; current fixed assets = $40,000; projected future sales = $475,000.

• A) $11,818
• B) $51,818
• C) $12,818
• D) $52,818
• E) $60,818

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Definitions:

Prime Costs

The direct costs of a product, which include the costs of direct materials and direct labor involved in its production.

Tires

Rubber-based, circular components designed to cover the wheels of vehicles, providing traction and absorbing shock.

Product Cost

The total amount of expenses incurred to produce and deliver a product to the market including materials, labor, and overhead costs.

Period Cost

Costs that are not directly tied to the production of goods and services, such as sales and administration expenses, and are expensed in the period incurred.