Muckenthaler Company Sells Product 2005WSC for $40 Per Unit

question 63

Multiple Choice

Muckenthaler Company sells product 2005WSC for $40 per unit. The cost of one unit of 2005WSC is $36, and the replacement cost is $35. The estimated cost to dispose of a unit is $8, and the normal profit is 40%. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?

• A) $16.
• B) $32.
• C) $35.
• D) $36.

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Definitions:

Marginal Utility

The change in satisfaction or utility that a consumer experiences from consuming an additional unit of a good or service.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Soft Drink Dispensing

The process or equipment used for serving soft drinks, typically seen in restaurants, convenience stores, or vending machines.

Marginal Costs

The augmentation in total expenditures resulting from the production of an additional unit of a product or service.