A Piano Manufacture Has a Daily Fixed Cost of $1,400

question 4

Short Answer

A piano manufacture has a daily fixed cost of $1,400 and a marginal cost of $1,900 per piano. On a given day, what is the cost of manufacturing 3 pianos $ __________

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Definitions:

FASB

The Financial Accounting Standards Board, the organization responsible for establishing and improving financial accounting standards in the United States.

Present Value Approach

A method to determine the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Installment Sales Method

An accounting method that recognizes revenue when payments are actually received rather than at the point of sale.

Accrual Method

A bookkeeping approach that registers revenues and costs as they are accrued or realized, irrespective of the timing of the associated cash transactions.