Hurricane Wings Has Budgeted the Following Costs for a Month

question 47

Multiple Choice

Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold.
$\begin{array}{lr}\text { Wings, breading, and sauce } & \$ 4,900 \\\text { Direct labor (Variable) } & 3,500 \\\text { Rent } & 1,10 0\\\text { Depreciation } & 900\\\text { Other fixed costs }&400\end{array}$
Each wing sells for $0.80 each. How much is the budgeted variable cost per unit?

• A) $0.35
• B) $0.45
• C) $0.80
• D) None of these answer choices are correct.

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Definitions:

Dividend Income

Income received from owning shares of a company that pays dividends, which is a portion of the company's earnings distributed to shareholders.

Dividend Preference Theory

A theory that suggests investors prefer dividends over future capital gains because dividends provide certainty.

"A bird in hand"

A principle implying that it is better to have a certain, smaller benefit now than a possibility of a greater benefit later, often used in dividend policy discussions.

Future Earnings

Projected or anticipated profits a company expects to earn in future periods, often used for valuation purposes.