The Current Cost Structure for the Production Department of Performance

question 43

Multiple Choice

The current cost structure for the production department of Performance, Inc., has fixed expenses of $500,000 and variable expenses of $200 per unit.Unit sales volume is 6,000 units.Performance, Inc., can invest in automated production equipment which will increase its fixed expenses to $980,000.What is the new variable expense per unit after automation that will produce the same current operating income on sales volume of 6,000 units?

• A)$80.
• B)$100.
• C)$120.
• D)$200.

Understand the concept of recaptured depreciation.

Grasp the impacts of taxation on business operations and cash flow.

Analyze the relevance of cash flow from assets and its components in assessing the financial health of a company.

Understand the concept of capital structure and its impact on a firm's financing decisions.

---

Definitions:

Triangulation

The use of two or more research methods to address the same research question. If results from different methods agree, researchers can have greater confidence in their findings.

Multiple Methods

Refers to the use of various research methodologies to enhance data validity and reliability in a study.

Best Perspective

The most suitable or advantageous point of view or approach in assessing a situation or problem.

Human Communication

The process of creating, sending, receiving, and interpreting messages through verbal, non-verbal, and digital means among individuals.